In my last column, in May, I looked at how tech adoption might change as a consequence of the current pandemic. In hindsight, I was perhaps too optimistic.
Like many, I thought Covid-driven isolation and lockdowns would be temporary and things would quickly revert to normal. Now, as we face the prospect of a ‘new normal’ that will last, some say, until the end of 2021, it is clear that a lot of the change in the way we live, work and socialise will be around longer than we thought.
The systemic shock caused by the pandemic is accelerating the pace for technology adoption in real estate. However, it is by no means happening homogenously.
Investors across the board are battening down the hatches, exercising caution towards their portfolios and new deals. They tend to prioritise existing portfolio companies ahead of making new investments and any new deals must not only make sense in the current environment but show resilience to weather the uncertainties we may face in the next 12 to 18 months.
This is likely to have the effect of culling some proptech offerings on the market. Weaker, less well-funded companies will fail. Those that survive will have the product, vision and resources to survive and thrive in the medium to long term.
Inevitably, start-ups that rely on traffic in the built environment to demonstrate value, or that support industries such as hospitality and retail, have suffered most as people have significantly reduced their mobility and travel, and rerouted their discretional spending online.
The logistics sector has been the major beneficiary of this change in habits as consumers increasingly choose delivery over other options. Proptech solutions that digitise physical processes and reduce the need for users to interact face to face, allowing people to work or otherwise interact as normally as possible despite the pandemic, are also in the spotlight.
One of the biggest trends in this area is the so-called ‘return to work’ investment into aspects such as touchless access, contactless delivery, remote management and more. These types of product have become more significant in the current crisis than ever before.
That said, investors are already thinking ahead. They understand that having a solution that works today just isn’t enough. Though there are varied views on whether the pandemic’s effects on real estate will be permanent or not, the fundamentals of what makes a good proptech product will not change. Reducing the need for human contact is the urgent need, be it via gesture-based building controls, platforms that eliminate the need for human contact in real estate deals, or technology that enables safety and social distancing on construction sites.
In the long term, some of these products will become part of the normal way of doing things, while others will become obsolete. But the goal will not change: to embrace technology that makes real estate safer and more efficient, and offers a better experience for its users.
Angelica Donati is chief executive of Donati Immobiliare Group