Here in the UK, we are fortunate to have truly world-class real estate and tech sectors, however, is there scope for the two sectors to be doing more together?
Prop-Tech is technology which is accelerating processes within the property sector which includes renting, buying or managing property. Prop-Tech solutions can also have positive commercial benefits for developers and investors, where decisions around site acquisition, funding and demand could be made simpler, more efficiently and far more accurately. But is it being used?
The global Real Estate industry is one of the most important sectors of the global economy with key parties operating within in, including: financial institutions, contractors, developers, retail operators, industry, public sector along with asset operators and banking. However, it is one of the least digitized industries with little investment in innovation and technology over the decades.
One of the biggest reasons for this also becomes one of the biggest barriers for the future success of Prop-Tech, and that is the culture within the real estate sector. Property is an old sector where people typically acts in more traditional ways. There are currently some excellent platforms and products on the market which have been derived through data and AI however, the issue is that most property professionals within the sector do not necessarily accept or appreciate that a problem exists, so for Prop-Tech companies, the challenge is convincing these organisations that the gaps exists for these technologies.
The good news is that we see some key areas where positive change can help increase the use of tech within the sector which would also have excellent economic benefits. Good quality innovative approaches can support challenges across our planning system, community engagement, large-scale regeneration projects, the private rental sector, social housing and achieving net zero through sustainability.
Government should also be waking up to embrace Prop-Tech in dealing with some of these incredibly outdated approaches, the planning system alone – we are seeing developers waiting 18 months for some planning decisions in the UK because we have old manual archaic systems which have not evolved in decades.
We would like to see further Government opportunities – not just for funding but also the chance to embed tech within processes including procurement, consultation and to see more policy changes being driven by data science and AI.
Government also has an important role to play in fostering relationships with the private sector in order to make it easier for existing Prop-Tech companies to bring their skills and platforms forward, rather than those companies working in isolation to educate the market.
The good news is that we are starting to see a shift towards Prop-Tech, a global industry now worth $25bn with an expected compounded annual growth rate of 15% until 2030.