Insights

November 2019

By November 27, 2019 No Comments

PropTech was barely a topic of discussion a few years back. However, due to digitization efforts in various industries, the real estate market also attracted its own share of technology incumbencies. PropTech can be defined as using technology to disrupt and improve the way we buy, rent, sell, design, construct and manage residential and commercial property. In this specific article, we will focus on trends which may attract future investments into PropTech 3.0’s ecosystem; specific to the commercial real estate sector (estimated market size of $32 Trillion).

PropTech 1.0 resulted in the growth of online listing sites back in 2007. The second wave, PropTech 2.0, emerged with the use of data analytics and virtual reality to offer better and more specialized services for customers.  In 2019, PropTech 3.0 introduce the experimentation with emerging technology such as drones, virtual reality tools, IoTs blockchain and artificial intelligence into the real estate’s ecosystem

PropTech 3.0 will revolutionize the real-estate industry and lead to reduction in cost and resources associated with real estate lifecycle, resulted in enhanced efficiency, time saving and improvements in the way the industry funds, designs, constructs, buys, rents, sells and manages residential and commercial property.  Patent analysis reveals that China, Japan, USA, and South Korea are amongst the top countries focusing in PropTech R&D.

Figure 1: The PropTech R&D geographical distribution
Source: SMES Patent Analytics. The data set has been retrieved from Orbit & Derwent Innovation databases.

Many concepts have emerged in PropTech 3.0 domain with breakthrough technologies that are benefitting the real estate sector. Based on our research we have come across various innovations in different PropTech technology sectors, some of which are provided below:

  • Real Estate FinTech

    Real estate crowdfunding has benefited significantly from the rebound of real estate since the financial crisis. These firms, although perhaps not as hyped as they used to be, are still a very interesting part of fintech. FinTech in real estate aims to provide investors with direct access to real estate investment opportunities online, to fix and control the market.

    Digital marketplace for real estate investing aims to connects investors who want to invest in real estate with institutional quality real estate investments. Through these platforms investors can invest in real estate opportunities online through a private, secure website. Investors can browse investments, review due diligence materials and sign legal documents securely online. Other platforms can manage title, closing, and escrow by bringing lenders, title companies, consumers, realtors, and all other transactions in a one space. It provides best closing experience that meets the industry’s maximum stringent security requirements.

  • Collaborative Economy

    Buoyed by remarkable advancements in data processing, storage, and ingestion, consumer preference for access over ownership propelled companies like WeWork and Airbnb into the mainstream. These companies leveraged the shared economy to make physical spaces more fungible – including homes, offices, retail shops and storage space and aiming to improve the user experience of renting, buying, selling, and building physical spaces.

    Shared workspaces for technology startups and services for other enterprises is an emerging market that revolutionizing the way people and companies work.

     

  • Contech

    ConTech is the technology used to innovate the way we plan, design, and build structures, as well as the manufacture and installation of their components. There are many definitions that would lay down the foundations of the how would ConTech would benefit the construction industry processes and methodological relation to other construction industry technological advances.

    3D printing technology for construction is one of many examples of the cross platforms between ConTech and PropTech. AI for construction workflow management, deploy sensors throughout the construction process and provide a platform for management of data is also anther benefit of the ConTech within the PropTech ecosystem.


    Picture 1: Dubai Innovation Center, Warsan Area, Dubai, UAE
    Source: Khaleej Times

     

  • Blockchain

    A blockchain is a time-stamped series of immutable records of data that is managed by a cluster of computers not owned by any single entity. Each of these blocks of data (i.e. block) is secured and bound to each other using cryptographic principles (i.e. chain). Experts expect that PropTech 3.0 will be powered by blockchain and artificial intelligence. Blockchain can significantly impact the real estate industry by eliminating the need to be dependent on intermediaries. A platform powered by blockchain would also create a word of digital asset management, which would register ownership and manage and distribute revenues directly.

    Real estate tokenization platforms can provide tools and modules for creation, issuance, sale, distribution, management, tracking and trade of tokenized properties. These blockchain-based platforms enable established real estate companies to increase value and liquidity of real estate assets through tokenization. Similarly, fund management platforms provide features such as cross-border payouts and redemptions, digital contracts, investor verification through online verification process, real-time investor & lead overview powered by a transparent & automated blockchain-based registry.

     

  • Artificial intelligence

    AI in its most basic terms is the simulation of human intelligence processes by software. What it does and how it works can vary depending on the task it’s aimed at. AI can improve and enhance almost all digital consumer experiences delivered by property agencies: it can help consumers get to the right information more quickly and can add significant value in recommendations based on their choices. As we move more and more to meaningful AI, we will see PropTech solutions start to deliver new and improved agency services for both buyers, sellers and tenants.

    AI platforms can be used to locate deals and rank properties based on their development potential. AI can also estimate the anticipated return on investment of each property and enable computers & mobile devices see real life images and analyze the retrieved data to create solutions for the needs of enterprises.

     

  • Smart Real Estate

    PropTech solutions embedded with smart, wireless sensors are radically changing the smart building industry. Affordable, low-maintenance PropTech means real estate companies of all sizes can also experience the benefits of the Internet of Things – cost savings, increased margins, and improved tenant relationships.

    Smart products like glass that tints on demand and improves the human experience in the built environment is one of advantages of using smart devices and materials in real estate. This electrochromic glass can reduce costs for building owners, increase energy efficiency and improve occupant comfort. Smart Space Utilization is Changing work patterns and driving many companies to re-evaluate their real estate footprint and adapt to lower demand for physical space.

     

November in Pictures

IREIS 2019

30 October – 01 November 2019

TIP exhibited in the International Real Estate
Investment Show (IREIS) 2019 attended by high-level property professionals and investors that gathered for the progress of the real estate sector!

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Web Summit

04 – 07 november 2019

TIP participated in the best technology summit on
the planet, the Web Summit 2019! Web Summit is an annual technology summit held in Lisbon, Portugal.
Considered the largest tech event in the world.

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Hello Tomorrow Singapore

07 November 2019

Hello Tomorrow Singapore is South-East Asia’s foremost deep technology platform at which the leading scientific thought and business leaders dive into how the latest deep technological developments impact industry, society, and humanity.

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TIP Egypt Roadshow

11 – 12 november 2019

TIP Roadshow in November 2019, TIP organized TIP Egypt Roadshow attracted technology experts who are interested in creating a positive impact on the world through innovation!

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