There’s universal acceptance that technology is driving a seismic shift in commercial real estate. Becoming a truly data-driven and technology-enabled business is a task occupying the minds of the industry’s most senior figures.
Clarity around the ‘why now?’VTS recently hosted a roundtable in London on this topic, which brought together 26 property executives with a combined AUM of more than £500bn to discuss progress and the tech-related challenges keeping them awake at night. These break down into four key challenges:
There was consensus from the group that the critical outcomes expected of any chosen technology should lend themselves to clear ROI and ultimately help to generate revenue and reduce risk.
Strengthening tenant relationships, reducing transaction cycle times and driving efficiency are key goals for proptech implementation. Additionally, execs are focused on getting cleaner and more accurate data by removing human error. In fact, according to Mike Pegler from Kennedy Wilson, there are powerful possibilities for commercial property when the data is useable. This paves the way for “AI and analytics that support better decisions to create portfolio value”, he said. “With the right systems, we’re in a far better position to use our data to make meaningful decisions and have a higher level of confidence that those decisions are the right ones.”
The customer experience
The industry is adopting a far more tenant-centric approach to managing portfolios. There has been a clear shift from thinking solely of tenants in terms of leasing to a more client service orientation.
Most would agree that data is the key to better understanding the demand from tenants, how they want to use space and how their future requirements might change. This information is critical in driving retention, building space fit for purpose and strategically buying the right assets.
As James Cooksey from The Crown Estate said: “We are trying to work out how to create a platform to connect to our customers as well as facilitating them to form a community/ecosystem by connecting to each other. For us, the customer is defined by the people who work and live in our spaces; by aggregating, we create the opportunity to offer a series of personalised services.”
Build vs buy
Businesses often bemoan the quality of data and loss of time and resources when it comes to implementing in-house leasing and asset management solutions. Now, however, the scope of technology has changed and the influx of VC funding has led to an explosion of new proptech offerings that address real challenges.
Identifying sustainable long-term players from short-term ideas will continue to be a challenge for an industry that has not changed its procurement methods for some time. However, it is evident that the days of businesses trying to build or heavily customise their own technology are long gone.
Building tech teams
Alex Price from Palmer Capital made an excellent point about building in-house expertise. “If we are going to have to change the way we think about customers through technology, we are going to have to demonstrate that we are changing internally and that means bringing people in with different thoughts, ideas and processes,” he argued. Hiring the right talent is imperative to achieving consistency of innovation. Data serves no purpose unless there are people in place who know how to plan and harness it for better decision-making. The message from the room was unambiguous: adapt, get smart and start making impactful decisions on your digital strategy today.
Ryan Masiello, chief revenue officer and co-founder of VTS