Funding for property technology in the Asia Pacific is predicted to reach $6.3 billion in 2020 alone. But if you think it’s about technology, think again. It’s all about the customer.
Richard Fennell, JLL’s head of property and asset management in Australia, has observed a dramatic shift over the last year or so.
Where once property companies looked to technology solutions to support better brokerage and leasing, they’ve recently branched out “to focus on what the end user wants”.
The fact that property companies now talk about “customer experience” rather than “tenants” is more than mere semantics.
“Investors in property are now focused on amenity and services within their buildings to attract, retain and enhance customer relationships,” Fennell says.
Technology disruption has changed the way people interact with real estate, Fennell adds, pointing to online retail and flexible working as examples that enhance the customer experience.
The property industry is responding to customer expectations with “exponential growth” in social media monitoring and management, new channels for building occupants and customers to connect and share, new types of workplaces, and fulfilment and logistics centres that solve the last mile delivery conundrum.
Fennell says ubiquitous Internet of Things technology in buildings is also enhancing the customer experience.
“Data analysts are now in real estate teams and mining data to come up with actionable insights that improve building performance, as well as customers’ comfort and convenience.”
The Stockland Accelerator, established with Blue Chilli, emphasises the human element in proptech’s future.
Among the 12 start-ups in the accelerator are an app for carpooling parents, a neighbourhood connector that brings people together to care for their shared spaces, a solution to help older Australians age in place, and a platform which provides home buyers with personal valuations of lifestyle, sustainability and cost of living.
Robyn Elliot, Stockland’s chief technology and innovation officer says it is “early days” but “we are excited to be exploring a different way of working and seeing ideas for new business opportunities that create better experiences for our customers come to life”.
Beyond tricked-up tech
Real estate may have a reputation as a slow adopter of technology. But Andrei Dolnikov, founder and CEO of Binyan Studios, one of the world’s largest 3D design studios, doesn’t buy it.
“I think the property industry has actually been open to embracing new tech, but much of what has been offered has been pretty average and not bringing much ROI,” Dolnikov says.
“Just because you can have your viewer zoom around an apartment with a joystick does not mean that helps you close a sale. Buying property is not a game, and most buyers – especially those a bit older – are not gamers.”
Dolnikov is a champion of the customer experience over tricked-up tech.
“Getting the balance right between user-driven functionality, simplicity of use and curated experience is still a work in progress. But it’s getting closer,” he says.
“I actually believe that thinking of these solutions as ‘products’ is a problem. They need to be thought of as customer journeys with unique tech add-ons designed bespoke for each project, especially at the top of the market.”
Dolnikov points to work he recently completed at New York’s Hudson Yards. To sell the luxury penthouse, the developer commissioned five “super-cool” interior designers who each presented their ideas through a VR tour or, more commonly, on a large flat screen.
“It was a ‘less is more’ approach which puts the product – not the tech – front and centre.”
At the tipping point
Deb Noller is CEO and co-founder of Switch Automation, a smart building software company that specialises in building performance optimisation.
Noller says the commercial real estate industry is at a “tipping point”.
After years of employing “reactive maintenance models” innovative leaders are embracing proptech to drive “proactive maintenance”. This is “accelerating their own business growth, delivering better value to their customers and achieving a high level of user engagement,” she says.
Noller also emphasises the “human experience”.
“From space utilisation and workplace design, to selecting efficient service partners and supporting employee happiness, the entire human-experience for years to come will be affected by how we use technology to improve business today.”
And it’s no longer the chief information officer’s responsibility to drive the proptech agenda, says Brian Devlin, industry director of enterprise software pioneer TechnologyOne.
“CEOs are increasingly seeing digital transformation — and the essential role data plays in enabling that — as a strategic business-led initiative, rather than an IT-led undertaking”.
But that demands an “innovation mindset” and a focus on people, Devlin advises.
“It's one thing to have the enabling technology and systems but what's really required to see change is having your people on board and adopting new ways of working.”
Looking to the future
JLL’s Fennell has crystal clear advice: keep your eye on the macro trends to stay a step ahead of the competition.
“Often companies adopt a ‘wait and see’ approach with technology, but the way that proptech is moving so fast, companies can’t afford to adopt this mindset,” he warns.
“They need to start the journey, start small, experiment and keep implementing improvements in technology where they can. It’s the only way to stay competitive.”
Noller’s message is equally blunt.
“Traditional facilities management as we know it is dead, and because these smart building investments will offer increasing value early, the industry winners and losers are being decided now.
“Don’t render your business obsolete by failing to act. Kodak invented digital cameras, defending their old business model to the death, as did Blockbuster and countless others. Technology has a proven habit of appearing out of nowhere and then becoming ubiquitous—so the time is now.”
“Disrupt or be disrupted,” Devlin adds. “Digital transformation is the top of the list for businesses looking to become nimbler and more responsive to customer needs.”
Dolnikov urges property leaders not to be “put off” by a technology that “did not work two or three years ago”.
“Technology advancement moves very fast. But at the end of the day, if people walk out from your sales centre raving about the tech – you have not succeeded. You want them to fall in love with your product.”