The coronavirus pandemic is upending real estate and accelerating change, delegates heard at Real Asset Media’s Innovation, Data & Proptech Investment Briefing, which was held online yesterday.
‘The epidemic represents the greatest opportunity for the real estate industry and for proptech in particular,’ said Antony Slumbers, CEO, PropAI. ‘It is a flywheel of change, compressing 5-10 year of evolution in 12-18 months’.
In such a fast-moving environment it will not be the strongest who survive but the ones most responsive to change, as Charles Darwin noted.
‘The crisis means that it is possible to do things today that people had been trying to do for ten years and hadn’t been able to,’ said Slumbers, such as innovating, changing their business model and adopting technological solutions.
At the beginning of 2020 it looked like climate change would be the dominant issue, driving a profound re-assessment of risk and leading to new and harsher regulations for an industry that uses 40% of the world’s energy and is responsible for 30% of greenhouse gas emissions.
‘Coronavirus has changed everything,’ Slumbers said. ‘People will not simply ask but they will demand something different in the future, like up-to-date air quality monitoring. The two zeitgeist-changing norms are that outside can be a scary place and that the entire world is in it together’.
After ten years of bull market, there was some complacency in the real estate industry and a feeling that innovation was not needed, as things were going well anyway.
Now ‘offices are empty, occupiers are scared of them and maybe companies don’t need them anymore,’ he said. ‘The traditional industry response of cutting overheads, capex and expenditure and hunkering down to survive the storm will not work this time, because it is not a cyclical market issue but an existential health and safety issue’.
This time landlords will have no choice but to invest in a broad range of things, from upgrades to ventilation systems to new fittings and furnishings, from new cleaning regimes to data and analytics, Slumbers said: ‘The only way out of the crisis will be through spending money’.