Proptech is a good investment, not a cost, delegates heard at Real Asset Media’s Proptech Briefing, which took place online recently on the REALX.Global platform.
“Selling tech to investors or landlords is like selling a mobile phone in the 1980s,” said Florin Iarca, head of sales, UK & Europe, Datscha. “It is still an embryonic market. We are educating people as well as selling, but in the end the product wins. If it works, people are easily persuaded.”
As they adopt tech solutions, users quickly discover the value they can deliver and their perception changes.
“At the beginning, people see the cost and there’s a fear that tech might not work,” said Michelle Buxton, managing director, Toolbox Group. “There are cultural, social and skill barriers and a lack of understanding, it takes time to see how much value tech can add and how it can contribute to reducing costs.”
Companies’ fear of failure is very real and must be addressed. They must be guided by the hand and take baby steps. Adoption leads to understanding, but the customer management process is crucial.
“We share our roadmap with our key clients and make sure our thinking is aligned with their vision for their portfolio,” said Lukas Balik, co-founder and CEO, Spaceflow. “It is important to bring them on board and have a joint strategy.”
It is all about education as to the immediate benefits that proptech can deliver.
“Tech will enable efficiencies and savings but to get there you need to make an investment, which is not a cost,” said Buxton. “In order to make that investment, you need to understand its value. We’ve done a lot of research into value and seen a 15% drop in costs for our clients.”
Quantifying tech value can be difficult
Having an integrated platform for tenant management, workflow management and security can lead to massive savings, but it can be difficult to quantify the value tech brings.
“We’ll be monetising things we never monetised before with an on-demand services model,” said Balik. “It’s an opportunity to reshape your product and grow your business.”
The speed of change has accelerated enormously but it is still a transition phase.
“In future we’ll see higher valuations for buildings with good air quality,” said Francesca Brady, CEO, AirRated. “At present we see lower vacancy rates rather than higher prices, but soon there’ll be a shift to lower values for non-compliant buildings. Companies will have no choice if they don’t want to be left behind.”