Is PropTech still around?

Almost 1 year ago, I was making a statement: Proptech, as a term, will disappear.?

I was reasoning that as with many things in our history, property technology will become so embedded in real estate processes, that we won’t use the term anymore. Think of “phone” - it now stands for mobile phone and even smart phone, without having to clear that out in wording.

Now, I think that this idea is becoming even stronger. Looking back at everything we’ve been through in the past 3 years and what we’re still bound to experience - the effects of the pandemic and the economic crisis, the new ways of work, the uncertainty in the office industry - it’s getting increasingly clear that technology is key in real estate.

We’re seeing that tech becomes a layer that optimises, accelerates real estate processes. This is what today’s customers want and the way to meet an ever evolving, dynamic environment.?

When it comes to the office industry, I think there are several digital tools and technologies that meet needs in such an obvious way, that they accelerate the de-use of “proptech” as a term.

• Digital twins transform traditional showcasing and leasing, and become a high-valuable asset across all life stages of a building. 3D tours speak to clients: when it comes to millennials, more than 80% want a 3D tour or digital floor plan when they search for a home. Big companies like JP Morgan also start to acknowledge the benefits of virtual tours, especially when it comes to showcasing off-plan buildings.?
• Custom 3D Space Planning is a tool that elevates 2D office plans and provides tenants with an interactive virtual tour of their future space. This solution comes with benefits especially given all the transformations we see in the office market. Given the high number of hybrid workspace plans, refurbishment or repurposing projects, being able to showcase the potential of a space in 3D virtual tours increases chances of a tenant to be convinced to rent faster.
• The rise of AI is yet another factor that impacts, for example, sales and marketing, giving access to tons of data. Automation will be critical in real estate, as digital space planning will be available instantly, new construction hypotheses will be tested faster, self healing materials will become a thing and new solutions to becoming more ESG friendly will be generated within seconds. as manual labour will be reduced.
• Fintech and proptech will be increasingly intertwined. Digitalised financial processes and real estate technologies together can bring valuable advantages to players who understand the potential of a tech ecosystem: faster financial analysis, smoother divestment procedures, agile cost optimisation.?
• Digital contracting is one of the elements that has an enormous potential to reshape the industry, as it is faster, less prone to mistakes and doesn't depend on the location of the signing parties.?

One of the areas technology can also play an essential role in real estate is ESG. We’re talking about sustainability and tenants even look for landlords’ commitments to making greener choices when it comes to energy consumption, materials, policies. And they are right to do so: 50% of resource consumption is attributed to the building and construction sector.?

With the increased adoption of tech in real estate, the role of Chief Innovation Officers becomes critical. The calls they have to make should balance risk-taking and opportunity-seeking in a way that doesn’t limit testing, while bringing results in the long term. Tough job. But the truth is that we’re looking at a future where players that don’t embrace technology, will have a rather hard time surviving.?

The next 30 years will be nothing like the past 30. I was writing in this Pi Labs article about the questions we left unanswered about the office industry. While it’s hard to find the best answer now, I am certain that all solutions? will involve a high degree of technology use.?

I understand reluctance and evasiveness. I understand that we are hardwired to resist change and cognitive dissonance. At the same time, we’re talking about an industry so big that it makes room across all our lives’ areas. So many things can be considered real estate that’s hard not to acknowledge the role it plays in our world. With nothing else staying still, real estate will also move forward and technology will be part of its DNA.

Inspired by an article I originally published in Forbes.