Proptech has come a long way in the past decade. From the rise of property marketplaces in the early beginning, to harnessing big data, to using augmented reality (AR) to better visualize spaces.
2019 was a bumper year for proptech as we saw an increased focus from venture investment into the space. According to a report by therealdeal.com, US$12.9 billion was pumped into proptech start-ups by mid-2019. That was already more than all of 2017, which saw a then-record of US$12.7 billion in proptech investment.
So, with such large investments being poured into proptech, we here at Real Estate Doc (RED), give our picks for what would be the focus of the industry in 2020.
In coming up with this list, we have restricted it to only 5 of the largest trends which we believe will propel proptech forward this year. Given that the industry is huge, there are many more micro-trends that will definitely be streaming in the undercurrents shaping the ebb and flow of the industry but, by and large, these 5 should be the ones to look out for.
1. Big Data and Digitization
Big data is on everyone’s mind these days. And rightly so. Most landlords and organizations already have a ton of data at their fingertips, just waiting to be converted into useful information (or analytics). Being able to use what you already have to make better decisions for your business is a simple and easy direction to go into.
This ties in nicely with digitization. Transactions in real estate have traditionally been very paper-intensive. With technology, digital contracts can easily help streamline processes and workflows, making it much more efficient and less time-consuming to close deals.
With digital contracts, data can be easily captured and converted into analytics, eliminating the need for manual data entry and the potential human error when doing so. This is a win-win for organizations as they are able to convert sales quicker, and draw analytics from these transactions automatically and without error.
2. Going Green and Sustainability
Green sustainability, especially in buildings, have been gaining momentum for a few years now. We do not expect that to change in 2020. In fact, we see the trend getting more steam with more companies hoping on the green bandwagon.
New York City have enacted a law that requires buildings to display their marks on energy efficiency in 2020. This means that buildings in NYC will be graded on the amount of energy they use and this plan is in line with the city’s goal to reduce greenhouse gas emissions of buildings.
NYC is not the only city in the US that has this, Chicago too has an energy rating system that requires buildings to comply with energy benchmarking. On the Asia-Pacific front, Australia has a national initiative for energy ratings.
We see the trend towards sustainability ramping up in 2020 and technology will be at the forefront of enabling this to happen.
3. Community Building Using Technology
The war for office tenants is heating up globally, with landlords focusing on fostering community camaraderie in a bid to attract and retain tenants within their network of buildings.
This trend can be traced back to companies like Google, Apple, and Facebook, which offered ample spaces that resembled playgrounds instead of offices. Their rationale that this created an open and relaxed environment, which in turn stimulated creatively and maximizing productivity for their employees, paid off as these companies have went on and became multibillion-dollar juggernauts in their fields. Other companies have followed suit to create a less formal, and more open environment for their employees.
In 2020, almost half of the workforce will be made up of millennials, who value career progression and personal development in almost equal importance. That, combined with the reality of work-life integration and employees wanting to feel more connected, have led to landlords offering more engagement services such as yoga sessions and wine tasting events within their buildings, often using technology in the form of mobile apps for connectivity and communications.
4. Artificial Intelligence (AI) and Automation
AI will very much change the way real estate is being conducted, and will lead as one of the major trends in 2020. Almost every aspect of real estate can be changed with AI and the automation that comes with it.
Take for example our point above about sustainability in buildings. AI would be the driving force that constantly reviews data and automatically adjusts power usage and efficiency in the building. AI can also be used for space-planning, which would lead to a higher utilization of existing space, or even creating new spaces to maximize revenue for landlords. Our point about big data and digitization above can also be powered with AI for better decision-making.
5. Retail Tech
The last few years have been tumultuous for retailers, with retail giants Sears and Kmart filing for bankruptcy in 2018, and Forever 21 following suit in 2019. This trend is set to continue into 2020, and retailers and shopping mall operators are fighting back by using technology to bolster the shopping experience and provide exciting alternatives to traditional shopping.
We will be seeing more multi-channel engagements between retailers and shoppers in 2020 as retailers seek to find an edge amid uncertainties. These channels will, more often than not, leverage on technology. One such example is how IKEA developed an app back in 2017, leveraging on AR to allow shoppers to visualize what their furniture would look like in their customers’ homes.
Shopping mall operators will also play a part in helping retailers pull in the shopping crowds. From organizing treasure hunts in the shopping mall, to providing a rewards-based shopping experience using mobile apps, we believe much will be done to elevate the shopping experience using technology in 2020.
Looking to tech-up your real estate company and leverage on the latest technology has to offer? RED is perfectly suited for commercial landlords. Contact us today to find out more!
Co-Founder and COO
Real Estate Doc Pte Ltd