Gyana unwraps trends to watch
There was more investment in startups in 2018, greater awareness of product from decision-makers in large corporates and higher levels of tech-adoption across the sector.
But where next?
In no particular order, this is what I believe 2019 has in store for us.
People, people, people
Moving away from the typical ‘location, location, location’ paradigm, corporate strategies are finally transitioning towards a people-centric mindset. Shorter leases are prompting landlords to engage more with tenants in order to increase transparency and ultimately, retention – happier tenants stay longer. This can be delivered by providing seamless technology to ease their day-to-day life, creating a sense of community and maximising wellbeing. For instance, start-ups such as Enerbrain are reducing energy costs using AI while increasing comfort for occupiers providing better CO2 and humidity levels.
Data on people is also becoming more important and companies like Gyana are helping professionals to make truly information-driven decisions. Being able to answer questions like “What kind of people visit this area” or “What is the footfall of my competitors”– at scale – is crucial for a competitive advantage. In the end, isn’t real estate all about real people and how they interact with the built environment?
The rise of ‘Alternative Tech’
As Eleanor Jukes of LGIM Real Assets recently pointed out, property investors’ allocation to non-commercial (alternative) property is at its historical peak and the trend is likely to continue. Hotels, student housing, healthcare, self-storage are now becoming an increasing bigger part of institutional investors’ portfolio. As a consequence, investors will start broadening their horizons and looking at tech solutions to better manage and invest in these assets. Products like Optimand, a Software-as-a-Service tool that provides real-time demand data for hotels and entire cities, will boost investors’ confidence by reducing further uncertainty.
Tech giants are coming
What do Amazon, Alibaba and Google have to do with proptech? These tech giants have been long eyeing-up the built environment and we are now at a tipping point where their presence will become pervasive. In the retail space, Amazon is leading the way with Amazon Go cashless stores. Already up and running in Seattle, San Francisco, and Chicago, Bloomberg expect around 3,000 Amazon Go stores by 2021. London’s West End shopping district is likely to host the first Amazon Go store outside the US, according to a report in The Telegraph.
Similarly, Alibaba is rapidly expanding its offline retail store, Hema, throughout China and exporting their smart-city project “City Brain” to neighbour countries. Google has made forays into proptech with Sidewalk Labs in Toronto and more recently with the investment into AskPorter, an AI driven Property Management platform based in London.
Asset tokenisation gets real
How can I not end with a note on blockchain? Recalling Gartner’s “hype cycle” framework, in 2018 we have moved from a peak of inflated expectations to complete disillusionment, with most blockchain-related ventures failing.
But this not all bad news. It means most of the people that were in for quick returns have now moved on and the ecosystem can concentrate on delivering real applications, solving real problems. An example comes from the US where Harbor has recently launched the first institutional-grade platform for tokenising private securities, ensuring compliance across an asset’s entire life cycle. The first offering on the Harbor platform is a tokenised real estate investment trust, or REIT, from Convexity Properties —the real estate arm of DRW, representing $20M of private equity.
With more offerings to follow in 2019, this is an important milestone for the sector that has been lacking transparency and liquidity for a long time. Proptech is going to play a bigger role in your professional and personal life, one way or another, in 2019. Get ready.
Enrico Faccioli is chief operating officer at big data startup Gyana.