The reason for this has been simple.
- With long operating life of real estate new technologies are slow to replace the old.
- The sector becomes capital intensive, making the entry difficult for starting entrepreneurs with good ideas.
- The market is somewhat opaque and each real estate object is unique. This portrays less direct competition on the real estate market, reducing the drive to innovate.
However, the real estate market is now digitising. Digital sensors measure the building occupancy and the paperwork involved in transactions is now disappearing. Such technological innovations create a huge impact on existing structures. It also changes the business models, mainly because of digitising and applications under the PropTech name.
Proptech can be termed as a small part of a wider digital transformation in the property industry. It encompasses both, the technological change as well as the mental transformation of the real estate industry, and its consumers to our attitudes, movements and transactions involving both buildings and cities.
Opportunities in PropTech
The word PropTech can be divided into subcategories that define and elaborate on the innovation that is happening around this sector.
- Smart Buildings
- Sales platforms and webshops
- Digitisation of administrative management
- Rental platforms and Space as a Service
Space as a Service
Companies such as We Work and Spacebase are not rental platforms because they do not link tenant and landlord. These companies rent properties themselves for longer periods and divide these into smaller time and space blocks, with the aim of leasing these. This enables these companies to ensure a better match between supply and demand.
Talking about Smart Buildings, they are all about digital and other services in constructing efficient buildings that ensures:
- lower energy consumption
- more efficient use of space
- a healthy indoor climate and additional services providing greater user convenience.
With the help of such digital transformation, the real estate software solutions have experienced a boost that helps in engineering Smart Building that senses what the user requires and in return facilitates it.
Such transformation adds extra services and improved occupancy to the users that deliver added value. This means that the tenant may be prepared to pay a higher rental price per square metre.
How technological transformation is enabling digital journey for customers
Use of Algorithms and VR for a better impression
Numerous intelligent algorithms from platforms can make selections of buildings based on the personal characteristics of the tenant. On one hand where an individual real estate agent fathoms just a part of the market and can give, in a way, 10 suitable objects, an algorithm on the other hand can provide an overview of the entire market and can offer 50 instead of just a handful of them. Similarly, a good first impression of a building can be created via Virtual Reality and contracts can be signed digitally in the same manner.
Smart Building that provides feedback
There are sensors and Machine Learning equipment that collect data and learn through it. They enable Smart Buildings to give the tenant a positive feedback about their current use of the property and link advice to this to save energy or improve the occupancy.
With digitization, real estate software solutions have dramatically improved. A revolution is in the making in the real estate industry. Customers and business owners both, have embraced this change and have adapted themselves confidently.