Proptech can affect how we live, work and build. It offers solutions to many problems in the real estate sector, and enables a variety of services to be completed more efficiently, with benefits to both the provider and the client. For commercial office property, this is technology that is more than just interventional – it is outright disruptive.
Property for occupation, development, investment and management – all of these can be better served by new software, app or hardware solutions, which have so far been funded through sources such as venture capital.
For the period 2009-15, albeit mostly last year, Bloomberg reviewed where venture capital money was flowing, and found that about $1.8bn (£1.2bn) had been invested in real estate-related start-ups. This figure might sound small compared with the $50bn invested in the internet and software, but the opportunities it affords will undoubtedly evolve a lot over the next few years.
For example, the impact of proptech on the office market will be significant, minimising economic, environmental and social costs, to the benefit of all.
A building’s use will increasingly be shaped by proptech, and some office buildings are at the forefront of innovation.
The Edge in Amsterdam is an office space that is, in a sense, a conscious building. It can check the schedules of its employees and shape their environment accordingly. It can reserve them a locker – a different one from last time because, in this building, routine is discouraged. It can select them a desk, and then heat and light it to their exact specifications. It can also book them a room for that important 10am meeting, again, tailoring the room to its occupants.
Essentially, by the time staff arrive at work, straight into a parking space that The Edge has allocated for them, all that is left to do is the job itself. This shows how technology can alter patterns of use and encourage chance interactions, at the same time as providing choice and variety to an office employee’s everyday life.
Proptech will help to address the location of office space, building size and co-ordination, whether employees need to physically turn up and what companies need to do for staff wellbeing.
Firms such as Spacehop have created opportunities for homeworkers to co-locate with each other. Working in someone’s home, at their breakfast bar or in the study, offers a whole new perspective on co-working. How this is priced and what it means for the quantum of future start-up space is yet to emerge, while within the more traditional office environment, there is likely to be a trend towards innovative solutions to give staff a sense of community and a voice.
As clients have become accustomed to the dynamic nature of other industries with high service levels, they have rightly come to expect the same level of delivery and innovation from their real estate providers.
This expectation has been heightened by the use of consumer technologies and how this affects everyday life and workplace practice.
It is also worth noting the nature of the industry itself: property is inherently data-hungry, mobile and visually driven. As such, it lends itself to technology disruption and innovative solutions to deliver return on investment in the form of client satisfaction, staff retention or simply higher revenues and profits.
The use of virtual reality will affect the design process, the interaction between staff across locations and the interaction with clients for selling/leasing office space.
Savills’ involvement in proptech has been developing over the past five years, and collaborating with innovative companies has helped us understand what is possible.
At the Construct//Disrupt: Proptech event in May, where we supported host company BaseStone, a group of industry heads and start-up founders spoke about some of the trends affecting the next generation of workspaces. We heard about the need for connectivity and cloud technology, and about smog-eating building facades that counteract city pollution.
But why do we think this is important?
Well, we want to provide significant value to clients, and be at the forefront of whatever the future holds for the industry – and it strikes me that we are only at the beginning of the journey.
Nicky Wightman is director of worldwide services at Savills
