The impact of Proptech on commercial real estate
Proptech is a buzzword that combines property and technology. It’s an all-encompassing term to include any technological innovations developed for the real estate industry.
Like most industries, the real estate sector is being disrupted by technology. This disruption has, so far, happened more slowly in property than in other industries, but that’s all changing. Proptech is now one of the fastest growing investment sectors in the world. It is being fueled by the growing demand for transparent and up-to-date information in the highly lucrative global real estate market.
So far, proptech disruption has happened more in the residential sector than in the commercial market, but the waves are everywhere. In the commercial sector, various proptech tools are emerging that are targeted towards investors, landlords, property managers, builders, developers, and even governments.
Examples of proptech in commercial real estate
Proptech that is commonly used in the commercial real estate industry includes:
- Property websites that aggregate listings from multiple agencies. These portals allow buyers and sellers to easily search for market information. For example, www.realcommercial.com.au for commercial property in Australia and Property Guru in Singapore.
- Commercial real estate software – including customer relationship management (CRM) systems that automate and streamline many property marketing processes.
- Interactive 3D imaging software – that allows people to take virtual tours of commercial properties online.
Recent proptech developments
More recent proptech developments that have the potential to further impact both the residential and commercial real estate industry include:
- Blockchain technology – This enables secure online contract transactions to take place between buyers and sellers, potentially removing the need for many third parties that are currently involved in the process. Blockchain also enables payments via cryptocurrencies.
- IoT (the Internet of Things) – Increasingly, developers are including smart technology in properties such as predictive maintenance systems and temperature sensors. These appliances can automatically respond to variables to ensure that they operate in the most environmentally-friendly, efficient and sustainable manner.
- Drones – These can be used to capture 360-degree aerial images of properties and their surroundings or video footage of views from developments that are planned or under construction.
- Augmented virtual reality (AVR) headsets – AVR allows potential buyers to fully immerse themselves in the floor plans and layouts of planned developments or existing premises, rather than having to interpret two-dimensional drawings and plans.
- Artificial intelligence – Sophisticated artificial intelligence systems can be used to analyse huge data sets (commonly referred to as ‘big data’). The information provided by this analysis can be used for purposes such as property appraisals/valuations, cost estimates and maintenance planning.
The Asia-Pacific region is leading the way with many of these developments. For example, the Singapore government introduced an Industry Transformation Map (ITM) for the real estate industry in 2018. The ITM is focused on using automation, digitised contract templates, and predictive technology systems to streamline property transaction and facilities management processes.
What about people?
There’s no doubt that technological advances will continue to change the way people and businesses buy, sell, lease and manage properties. And it is likely that all sectors of the real estate industry will be affected.
However, the commercial side of the property market is still driven by a network of professionals who are offering the best of both worlds. They are using technology to provide a superior service to their clients while maintaining that personal touch that technology lacks.
What’s more, to date, technology cannot replace the human judgement and ability to react to dynamic changes in clients’ needs and requirements that experienced property professionals can provide.
About Tenant CS
Tenant CS is an independent Asia-Pacific-based company that provides commercial tenant representation services. We help our tenant clients to source suitable premises and to negotiate the terms and conditions of their lease agreements.
We have offices in Singapore and Sydney and a part of a global network of tenant advisors, which means we can service clients all around the world! Contact us today to find out how we can help you.