As real estate’s global giants scramble to strategise their way out of and beyond the depths of a pandemic-fuelled crisis, they are calling on their best problem-solvers, digital gurus and data experts to lead the charge. If the sector’s tech stars weren’t front and centre pre-Covid-19, they certainly are now.
“I was sitting in meetings with my phone under the desk googling real estate terms”
Dean Hopkins, chief operations officer, Oxford Properties
When Dean Hopkins joined Oxford Properties as COO in August last year, he took on a long-standing position with no reference to technology or digital strategy in title. This was, and remains, more significant than people might first think. A tech entrepreneur with more than three decades of experience, his appointment was explicitly made by the property arm of the pension fund “to help push tech innovation as the company adopts a digital-first strategy”. Tech is intrinsically built into his role and yet he didn’t join as a chief technology officer or a chief digital officer. Far from demonstrating a departure from technology, Hopkins’ recruitment into this much broader C-suite role highlights a fast-maturing approach to digital strategy across some of the world’s biggest real estate companies. It is increasingly no longer seen as a side element, but the heart of all business operations. And so it should be, says Hopkins.
He describes the past year as being incredibly intense – even before Covid-19 hit and more on that later – as he quickly realised that he had taken for granted just how much previous sectors he had worked in had embraced technology.
“It was clear that it had not yet permeated into real estate in the same way,” he says. “I realised when I joined that a lot of the changes which need to be instilled in real estate come down to how the sector works and the pace at which it moves.
“Real estate builds buildings and plans diligently, whereas tech works in the exact opposite way by building in short, agile sprints. This is a new concept in property and there is a degree of changing hearts and minds that needs to be done. Companies must adapt the pace at which they work. This is where I saw an opportunity to help and bring a new approach from my experience in other sectors, at pace. The real estate sector is still working at a certain cadence, even though the rate of change in terms of customer and tenant expectation is moving much more quickly.”
He adds that looking at new concepts and taking more risks summed up the first six months of his role at Oxford Properties. That and listening; “We all have two ears and one mouth,” he says. “We don’t spend enough time truly listening, rather we listen to respond. Often the solutions are already there if you just listen. A guy like me came into a sector as complex as real estate from the outside, spent a lot of time listening and then started to action some solutions,” he says. Before adding: “And sitting in management meetings for the first few weeks googling real estate terminology under the desk.”
The work Hopkins is leading at Oxford Properties plays in to his broad, chief operations officer role and runs through the structure of the fund’s entire real estate arm. He is not just focusing on technology for technology’s sake but is trying to change the whole mindset of the business by repositioning its approach to the market.
“When I arrived here, I focused initially on understanding how real estate makes money,” he says. “Then I tried to get my head around how technology is changing every element of the real estate value chain.”
He explains that much of the changes come down to data as the sector evolves from operating on an “opaque, analogue model” governed by reactive data to becoming much more fluid and agile.
“If you are buying an asset you will get sent a lot of data to analyse in order to work up your underwriting model,” he says, adding that it is still very difficult to access that data proactively without a deal on the table.
“I saw that most people in the investment and asset management side of the business spent a lot of time chasing data,” he says, explaining how he encouraged Oxford Properties to move away from this approach, to take the data element of the business and lean on technology to come up with a system where real estate decisions are made using a system of predictions based on current data rather than the more traditional approach of basing decisions on a system of record based on historical data.
“The industry should use this data to be more thoughtful about how acquisitions and asset management opportunities are targeted around the world,” he says. “This means the skills set changes too and tech starts to creep into the front office. I would argue that to be an underwriter or an asset manager now you have to be pretty good at analytics and data science, so we are giving people at Oxford the tools and training for that.”
He adds that of the biggest drivers for such big leaps forward when it comes to adoption and application of tech within real estate has been the Covid-19 pandemic. Not the route to change anyone would have wished for, but as he rationalises “they rarely are”.
Hopkins urges the wider real estate sector to be wary of getting left behind as digital strategies are picking up pace the world over off the back of the situation we all currently find ourselves in.
“The accelerated move towards reimagning the workplace has led to some tremendously healthy moves that will force spaces to work even harder for that competitive edge to draw in talent,” he says.
“On the digital front, because we have had to move very quickly to remote work, people now appreciate the power of technology much more. We have seen demand to get the tech products we have planned up and running much faster. Things were already starting to pick up pace and, as I said, everything has now been accelerated.
“In some ways the time since I joined the business has gone by in a flash, in others the last year feels like a century.”
“You can’t just say ‘let’s be innovative’. You always need a use case”
Sandeep Davé, chief digital and technology officer, CBRE
There is no such thing as an easy time to take on the top tech role at one of the world’s biggest real estate agents. It would be preferable, however, to avoid stepping in to lead the charge in the middle of the most extreme periods of change, uncertainty and chaos in recent history
That is something that CBRE’s Sandeep Davé knows a thing or two about, having taken on the role of chief digital and technology officer last month
The former Citi global digital strategy director was CBRE’s former CDTO for the global workspace solutions business before being promoted in July to replace Chandra Dhandapani, when she took on the role of chief administrative officer. And what a time to step up.
“These are extraordinary and unprecedented times, as we all know,” says Davé. “Taking on this role now is both a tremendous opportunity and a challenge.
“The executive team at CBRE recognised the huge impact that digital trends will have on real estate a few years ago and now we are seeing those trends becoming massively accelerated because of the pandemic. Both CBRE and our clients are facing major issues and pressing problems such as continuity of operations, a safe return to work and preparing for the future of the sector as the world changes. Technology is at the top of every one of those agendas.”
He adds that this will be more than just a moment in time.
“We are already seeing areas where the need for technology to enable the new normal is significantly enhanced,” he says. “There’s always a risk that, once the clouds clear, people return to the old way of doing things. But in this case, it’s different. I do think there will be two distinct ‘before and after Covid’ phases where we see a massive acceleration of digital technology adoption.”
Davé points to the safe return to work as a case in point. A recent CBRE survey has revealed that while 70% of the real estate professionals who took part said they are expecting to provide a “flexible working arrangement” to their employees as part of their future working strategy, the majority of them also said that they do not expect the physical workspace to be any less important than it was before. So much of delivering on this seemingly contradictory response comes down to the use of technology, says Davé.
It is the only way that workspaces can not only accommodate the degree of flexibility that global workforces have come to expect but will be able to facilitate a safe return to the physical workspace. “If you look at the current environment, the demands on the service delivery are going up,” explains Dave. “Increased frequency of cleaning, for example, or higher safety standards combined with the current situation putting extreme pressures on cost means that technology has a key role to play in enabling the new normal. Some of the things that we were looking at before such as predicative analytics and leveraging data to drive efficiency will become even more critical.
“Lowering cost through running operations more efficiently won’t just be a return-to-work issue, either. Once the world moves beyond the immediate and pressing needs around the return to work and occupancy tracking, the technology will be in place and the impact will have been demonstrated. This is the sort of thing we mean when we talk about the current situation accelerating pre-existing tech trends within real estate.”
Davé warns that more needs to be done if the real estate sector hopes to keep up with the changes the world is currently facing.
“What we are seeing currently is just scratching the surface. So much more needs to be done and there still needs to be a huge, sector-wide mindset shift.”
So does he think this is something real estate is finally, and collectively, prepared to do? “Yes and no. Clearly lots of the people I speak to are constantly asking the important questions like what do we need to do next? How are smart buildings going to look going forward? What does the facilities management model of the future going to look like? But in some cases, we just aren’t there yet and we really need to be.”
He adds that this does not mean blindly jumping on the technology bandwagon. Pragmatism is the way forward. There is little point, he says, in taking a big risk in pursuit of a shiny object in the future that no one really understands.
“You can’t just say ‘let’s do something innovative’,” he says. “There always needs to be a use case. The Covid-19 pandemic has created several very clear problems that the industry needs to solve, and wider tech strategy is no different. You always need to ask yourself, what is the most pressing problem that we are trying to solve right now? That’s your starting point.”
“In many ways, time is the most precious asset we all have”
Sineesh Keshav, chief technology officer, Prologis
Sineesh Keshav is a solutions man through and through. Well known for eliminating problems and smoothing processes in his previous roles at Experian and American Express, when he joined industrial investment giant Prologis in 2018, it became clear from the outset that his approach to path-smoothing was something he takes very seriously. So much so that the newly appointed CTO spent the first week in his new job trouble-shooting his commute. From tracking the impact of where he parked at the train station to monitoring traffic flow and observing the number of people at every stage of his journey, he was able to cut his travel time down by half. On one hand, this is just an amusing anecdote. On the other it reveals another level of dedication to finding the quickest, most efficient and cost-effective route possible to an end goal. And isn’t that what every company looking to streamline and monetise their business model is looking for?
It is certainly what Prologis wanted when they appointed Keshav two years ago. “This is my first real estate gig,” he says. “I’ve been in financial services prior to this and I didn’t know the first thing about industrial warehousing and how it works when I joined. I still have a lot to learn. But Prologis had been on a digital transformation journey for about three years prior to me joining and I was brought in to figure out ways to monetise the tremendous impact we have on the world’s economy.
“This may not be a very well-known fact, but a study found that Prologis has about 2.5% of the world’s GDP flowing through our warehouses. That is an astounding number and the business saw an opportunity to take that scale and monetise it, whether it’s through additional products and services or whether it’s through the data that we could collect from our properties to help run more efficient operations for our customers.”
Keshav is quick to add that his role also covers Prologis’s own internal digital transformation strategy. “There was definitely a need to run our own internal operations more efficiently when I joined,” he says. “This means taking systems, deconstructing them and trying to put them back together in a more efficient way like I did with my commute.
“It has involved introducing heavy levels of automation, which cuts out most of the need for a manual hand-holding. This leads to freed-up time which, in many ways, is the most precious asset we all have, and it allows our frontline employees to spend that time with our customers.”
And this, he adds, is where the real value lies. Working with customers to build new products is the key to monetisation. He points to Prologis Essentials – a digital marketplace where the company provides extra products and services to existing customers – as a prime example.
“It can be anything from pest control and janitorial services through to advanced automation and energy solutions,” says Keshav. “We work very hard on feedback so that everything we are doing is based on the fundamental paradigm of becoming data-driven in how we manage and run our business. We are still only just in the first innings and there is a long way to go.”
Keshav says that it helps to be working in a company where there is a desire to change from the top and that this culture runs through the whole business. “I can’t say the same for the real estate industry overall,” he adds. “The industry is probably somewhere in the middle of the pack when it comes to progressive technology adoption. But it is changing in a hurry. I talk to a start-up almost every day that has just come up with something new and innovative in our space, and that bodes well for us. These are difficult times, but opportunity has stemmed from adversity many times before and I predict it will again.”
He adds that the pandemic has also created a more global playing field in terms of job opportunities. As more major companies get used to remote working, he says there will be more opportunity to bring together teams of the best talent from around the world.
“We will go to the talent rather than wait for the talent to come to us. Folks who have learned these remote working skills will not unlearn them now. This will lead to a very different structure in terms of the way offices are set up and where people are hired.
“I firmly believe in the mantra that you should not expect the best talent to come to you. We have employees spread across the world, and that trend will be accelerated post-pandemic. I am sure there will be an increased need for the ability to collaborate across geographical boundaries. I can see this becoming a huge part of digital transformation across companies as employee experience changes.”
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