COMMENT The 2008 global financial crisis was credited with accelerating fintech and transforming the previously stagnant financial sector. Now, Covid-19 is set to do the same with proptech in commercial real estate, and the effects will be even more far reaching.
Before the pandemic brought about social distancing and lockdown, the aim of agents was to get potential tenants or buyers into the building (be it office, hotel or shed) in order to look them in the eye and convince them to rent or buy. Proptech was barely understood or appreciated – and in some cases even resisted.
Then, Covid-19 changed real estate almost overnight, and suddenly utilising technology became the only way to continue day-to-day business.
What has changed?
Virtual viewings using videos have become increasingly popular. Meetings that would have taken place face-to-face have been conducted on Microsoft Teams and Skype. Virtual valuations have been conducted, as well as virtual inspections.
We are at a stage of proptech development where the important thing is to move beyond the usual “if it isn’t broken, don’t fix it” mentality.
Having been involved in multiple proptech start-ups over the last five years and more recently as a mentor in Colliers PropTech Accelerator powered by TechStars, it is clear that a strong filter is required to find the companies that will truly be transformational and add significant value for companies post-coronavirus.
Products that enable us to do our jobs more efficiently at a time when cost control is so vital are going to be increasingly critical in order to maintain financial performance and come out of the crisis in a stronger position than how we entered it.
The role of tech post-coronavirus
The reason for technology should not be merely to become more technical, but to add purpose to how time is spent and enable teams to allocate more time to advising their clients. Product selectivity is key, as there are many thousands of new proptech companies out there making bold statements on how they are going to transform the industry without any significant substance.
The examples of how proptech will improve functions throughout our sector are myriad. In the new world that has been created by Covid-19, the so-called ‘internet of things’, whereby objects will be able to communicate via the internet, will have massive significance.
New technology, data-connected devices and sensors will enable buildings to become more interactive and responsive – something that will be essential with the installation of technology such as temperature monitors as part of the ongoing battle against Covid-19.
Proptech has the potential to be a game changer when it comes to capital markets brokerage transactions, investment management and asset management. For example, the time spent producing an investment memorandum brochure can be reduced by up to 80%, and by automating mundane tasks through the application of artificial intelligence and machine learning, we can free up human capital to focus on more valuable tasks.
Weeks that would have been spent negotiating 20+ non-disclosure agreements or developing and checking an investment memorandum marketing brochure will be managed more efficiently through technology to streamline the need for a constant back and forth of emails. Our team will be able to focus on creative problem solving and developing deeper, stronger relationships with our clients.
With time set to become an even more precious commodity, innovation will be valuable in the new way of working, as we manage our way through and eventually exit the current crisis. The greatest significance of proptech is not just that it will signpost the way to the future. It will also take us ‘back to the future’, by making it possible to spend more time with clients in the way that agents used to decades ago, with the added support and efficiency of the latest technology.
Robert Campkin is head of corporate capital solutions at Colliers International