While Covid-19 has impacted on our daily lives, it’s also had a significant effect on the property industry – and PropTech world.
The creation of lots of new PropTech firms in recent years has led to a small revolution within the real estate sector.
Offering flexibility and efficiency, PropTech promised to deliver innovative solutions and a competitive edge in the modern world.
Then Covid-19 came along.
While there will be PropTech firms struggling in the face of the pandemic, there are other tech firms that are thriving.
The big change since the first lockdown was to see the ushering in of video tours of properties, rather than having an estate agent guide a client around a property in a bid to it.
Now a potential buyer can be sat anywhere in the world and visit a property remotely – whatever time of day.
Real estate sector has had to embrace technology
Indeed, the real estate sector has had to embrace technology on a day-to-day basis and along with virtual viewings, they have also turned to Skype and Microsoft Teams to communicate with clients and staff.
There’s no doubt that those PropTech firms that help real estate businesses to work more efficiently and control costs will find the pandemic has boosted their attractiveness to potential clients.
Along with new technology, such as adding sensors to buildings and other data-connected devices, the aim is to make managing real estate easier, as well as more responsive and interactive.
Technology also makes the monitoring and security of a building easier since managers can more easily track movements and usage and then analyse any information that is collected about how to better use space.
Alongside this, heating systems and smart lighting allow for better comfort for building tenants who are also looking for superfast broadband connections that the modern business world is demanding.
The technology being discussed for being introduced post-pandemic may see the introduction of temperature monitors which may become part of the ongoing battle against any potential future pandemic.
Covid-19 pandemic may have changed the world
The other issue is that the Covid-19 pandemic may have changed the world for all of us with the increase in homeworking – so those in the commercial real estate sector will have to engage with technology, whether they want to or not.
It’s also worth highlighting that while many are saying that the Covid-19 pandemic will bring an end to the office, that is unlikely to transpire since businesses will still require a physical presence and they have a need for holding face-to-face meetings with staff, prospects and clients.
However, real estate firms will need to be more flexible with their own working arrangements and have in place effective ways to communicate and monitor what their staff are doing.
For landlords, the rise of PropTech may require a hefty investment but the potential of the return on investment for many tools is impressive.
There’s no doubt too that those spaces that are using new technology tend to be more attractive to modern businesses which, in turn, means there is a better opportunity for charging higher rents.
This means that PropTech will lead to lower void periods for landlords, and the better managing of empty spaces to boost profitability.
The PropTech revolution
Having said that, the PropTech revolution still has some way to go in real estate.
And since the CRE sector is renowned for being resistant to change, it’s likely that the advance of PropTech means that the days of ignoring the benefits are coming to an end.
Other potential issues affecting the sector, and this was highlighted in a KPMG report on the PropTech sector, is that 40% of real estate firms say they are unsure about the benefits of PropTech.
The same report also revealed that just 34% of real estate firms had a designated person within their organisation to lead their digitisation strategy.
It is likely that should KPMG carry out a similar report, they will find very different answers because property firms have been forced to change in a bid to survive. This means there will be growing numbers of high level employees being responsible for the implementation of technology – and finding out what potential solutions are available.
Many PropTech firms offer fantastic improvements
The trend towards using technology is in its early stages still and with so many PropTech firms offering fantastic improvements to the way we work, the sector is still effectively playing catch-up.
Despite this, the future of PropTech appears to be very bright indeed.
Sadly, a report from the UK PropTech Association has revealed that many PropTech firms are currently in ‘survival mode’ and many have been forced to close.
The Association says that 25% of its members are expecting growth despite the pandemic.
However, the Association predicts that in the long term, the adoption of PropTech will rise as landlords and managers are forced to find ways they can maintain buildings remotely and also process property sales online.
Provide funding for PropTechs
They say the government needs to act urgently to provide funding for PropTechs to survive these uncertain times.
However, it is becoming apparent for developers, landlords, managers and agents in a post-Covid world, that PropTech will not only become more community-orientated but also more data-focused.
Buildings will have higher safety standards and our offices will become smarter to fit in with new patterns of working.
For many in the CRE sector, Covid-19 has made a lot of firms reassess how they use PropTech and big changes are now underway within the commercial property sector as a result.
These changes will be long lasting, and many firms will be looking at how they can leverage PropTech to come out of the pandemic in a stronger position than when it began.
The bottom line is that the 2008 financial crash led to the rise of FinTech which then went on to revolutionise the financial world; many are pointing to the Covid-19 pandemic as being the time when the real estate sector will accept that PropTech is the way to work better and it will become the new FinTech.
PropTech is here to stay
Looking forwards, one thing is sure: not only is PropTech here to stay but thanks to the Covid-19 pandemic, it may have proved its worth to the naysayers and critics who will now have to catch up with the latest technology to deliver efficiencies and better-improved working methods within the UK’s real estate sector.