Space-as-a-service has fast become the industry-accepted description for the modern approach to providing and consuming commercial real estate; an on-demand, user-centric product, where occupiers buy all the features, services and amenities they need. But to what extent is technology helping a traditionally conservative industry transform towards this more user-focused real estate model?
That was the theme of the ‘Proptech Masterclass’ hosted by Experience Makers and Equiem at Huckletree Shoreditch. Comprising some of the leading voices in the UK proptech scene, the panel debated the future of the workplace, how technology providers can help speed the rate of adoption, and how tech can help meet the demands of modern office workers.
“What we are seeing is occupiers demanding far greater convenience,” Gabrielle McMillan, CEO of Equiem, commented. “Time is a hugely precious commodity for the modern worker and people want their working day made as frictionless as possible. Whether it’s ordering coffee to their desk, having their laundry picked up, or getting an eye test on-site, users want access to a whole myriad of convenient services within their building that help them save time in their working day.”
Alongside supercharging the services, experiences and retail that landlords can offer their occupiers, Equiem’s app provides owners with detailed occupier analytics. Collating unique, actionable insights into how users are interacting with a particular building, Equiem’s software enables landlords to make more effective asset management decisions by better understanding their occupiers. McMillan stressed the importance of harnessing this kind of building-by-building insight if owners want to meet users’ expectations.
“Whilst there are plenty of general trends that we’re seeing, the reality is that every building is different and the most successful landlords will be those who understand the specific needs of their own occupiers and respond accordingly.”
It was a point echoed by Darryll Colthrust, proptech strategist and former director of innovation at Palmer Capital.
“It’s really important to recognise that certain things will mean more to particular occupiers than others,” Colthrust said. “Owners need to work out what those things are. What can occupiers simply not do without? And this has to be an ongoing dialogue. Services and amenities that are at this point new and engaging will soon move down the pyramid to just become the expectation, and therefore owners will have to keep going back to the customer again and again in order to cater to their changing needs, because what makes them feel valued and happy is always going to change.”
But Sander Schutte, CEO of Mapiq, argued that in many cases, landlords still need to focus on getting some of the most fundamental requirements right. “What we are seeing is that many office users are still struggling with basic requirements like where to sit that day, or where to find phone signal or a quiet space to take a phone call. In that sense, a lot of companies are nowhere near the point of experiencing amazing amenities as the norm. Landlords have to sort those basic elements first before looking at wider experiential services.”
Mapiq’s technology helps landlords to do just that by integrating systems and providing end user applications with two focuses: experience – making it convenient to find a desk, book a meeting room, adjust lighting and temperature – and data analytics.
So with technologies like Mapiq’s and Equiem’s available to help landlords both understand and better meet modern occupier expectations, are we seeing rapid rates of tech adoption across commercial real estate yet?
Not yet, said Colthrust, who believes there is still a long way to go before we see wholesale tech adoption. But, as he points out, traditional owners simply won’t have a choice other than to embrace technology as time goes on.
“There isn’t enough of an understanding of all the other forces at play outside of real estate that are going to cause landlords to have to change the way they operate. So many industries adjoining the real estate sector are evolving and adapting. So even if landlords don’t want to actively change today, they will soon have no choice but to do so because everyone else around them is investing so heavily in technology adoption.”
Enrico Faccioli, COO of Gyana, a big-data company that provides insights into physical locations using human mobility data, agreed there is much to learn from other industries operating outside of real estate.
“We work across sectors and have good visibility of both real estate and finance. I think real estate is where finance was around 10 years ago at the dawn of the fintech revolution and challenger banks. The traditional banks invested heavily in technology and now have a significant proportion of their staff working across data and software engineering. They have developed very clear frameworks for tech adoption too. They always look at ROI and can back-test a particular solution to see how it affects their business model, alongside having a clear budget to spend on those providers who are able to provide good value for them.”
Reluctance to embrace technology in the way the financial sector has, may be the consequence of a more short-term approach to returns and benchmarking Faccioli argued.
“Generally speaking, real estate companies may only see value from technology adoption kicking in in three to five years. For fund managers who want to maximise shorter-term returns and keep outperforming the industry benchmark, investing in longer-term tech-led projects that don’t benefit them in the immediate probably won’t appeal.”
Schutte agreed that scepticism within the industry is an issue. “Whilst established technologies like ours add a great deal of value, save people time, and improve user experience, it can still be difficult to make a business case based on user satisfaction,” he says. “To me that’s crazy, because if businesses can increase the satisfaction, wellbeing and productivity of people working for them, there is clearly an enormous gain to be had, including economic.”
McMillan added that scepticism towards technology is often exacerbated by the emergence of new, half-cooked tech solutions that don’t actually deliver what they claim to.
“It doesn’t help that there are a lot of ‘vapour-ware’ providers out there, promising much but simply not delivering what they say they can,” she said. “Proptech firms must be prepared to be held accountable and provide clear ROI.”
If the rate of tech adoption is going to increase, McMillan said tech firms must work harder to understand their customers’ needs and the challenges they face.
“You may have the best app in the world, but if you don’t understand operationally what the change process is for your customer, how to work with them to roll your product out and actually get it to deliver value, it’s just pointless technology and of zero benefit to anyone,” she warned. “Ultimately, it’s incumbent on tech providers to listen to their clients’ needs, help them navigate change and enable them to take technology on with both hands, because if they do, there is huge value to be had.”