As featured in The Future of Proptech special report published in The Times, in association with Future PropTech and the UK PropTech Assosication.
The real estate sector and the built world affects our daily lives more than any other industry. After all we live, breathe, work, shop, dine, play, learn and commute in the built spaces around us. From that point of view, it’s incredible to think that digital disruption has yet to fundamentally transform the way that real estate works.
However we are now starting to see this changing in a major way. The term “PropTech” has evolved from being seen as a buzzword to now being recognised as an important strategy for the present & future of any real estate company.
For me, the journey started in late 2014, when I launched FUTURE PropTech which was Europe’s first conference dedicated to bringing the real estate sector together with the startups & technology providers that are providing innovative solutions. At this time there was less than 200 startups in the UK and no recognisable ecosystem or community focused on modernising the industry; my aim was to change that.
This task proved to be easier said than done. Helping to bring change to the world’s largest asset class that has been operating (very profitably) in same the same way for generations was a tall order. However we managed to bring together a passionate community of advocates that was as dedicated as I was.This group consisted of startup entrepreneurs, venture capitalists, service providers, media and the property companies themselves.The snowball of change was gathering momentum.
Fast forward 5 years and there has never been a more exciting time to be involved in the sector. Exponential growth has seen PropTech grabbing headlines across the world.
Over 824 startups are now in the UK with a total of approximately 7,247 around the world. Not to forget of course the thousands of incumbents that are now adding digital & PropTech expertise to their suites of existing products and services.
An impressive & record-breaking amount of capital has already been invested this year, over £25 billion to be exact. To put this into context only £1.4 billion was raised previously in the whole of 2015. It’s great to see so much investment going into the sector to support innovation and now that capital is relatively accessible, the real challenge begins;
Improving the world we live in.
With lots of capital comes great responsibility. Not only to deliver multiple-fold returns to investors, but to deliver real value to the target customers & society at large.This is the only way startups can grow to become multi-billion dollar companies that are adopted on a global scale.
It is the challenge of improving the world we live in, where I think PropTech can truly play a significant role. For example, the built world contributes about 40% of the UK’s total carbon footprint. This is mainly from the energy used in the running and construction of buildings and infrastructure. In order for developers to deliver smart buildings that produce net zero emissions, the very latest technology such as digital twins & IoT will have to be used alongside practical design elements such as living walls and automated lighting.
Another global challenge is the lack of affordable (and high quality) housing. Modular construction methods can build homes at more than 50% less time and at a cost that is 20% cheaper for the buyer. All this whilst delivering an energy efficient home built with environmentally friendly materials. Also emerging business models such as co-living and build-to-rent are already playing an important role to meet the government’s target of building more than 300,000 homes per year.
I strongly believe that these huge societal issues present a timely opportunity for the property and construction industries to galvanise and change the negative perception they receive. Whilst also meeting their ESG targets which are becoming increasingly important to institutional investors.
It’s not only for altruistic reasons because the companies that adopt technology will also benefit from improving operational efficiency, gaining competitive advantages, attracting & retaining talent and of course improving yield and profits. A massive win-win. And of course PropTech is the solution that brings it all together !
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