Law firm Freeths hosted a roundtable discussion to explore the gap between digital ambition and capability in real estate. The debate was chaired by Paul Unger, editor of PlaceTech. Taking part were:
- John McHugh, CBRE
- Dan Burton, Wondrwall
- Heather Staff, Spectre
- Jill Guthrie, Willmott Dixon
- James Agar, Schroders
- Dan Symonds, Glenbrook
- Vicky Russell, Property Alliance Group
- Jonathan Tizard, Select Property Group
- Tom Cheesewright, applied futurist
- Paul Bibby, Freeths
- Jennie Jones, Freeths
- Jill Carey, Freeths
Identifying the value in the technology was a must for all participants, although the definition of value ranged from customer satisfaction and better communities to the more traditional pounds and profit margins.
Examples of innovation in value creation ranged from setting yields automatically using YieldStar at Glenbrook, to Willmott Dixon taking clients on site and using virtual reality headsets to tweak design for the most efficient layout.
Jill Guthrie, Willmott Dixon’s head of digital, said: “I went to a site and had a customer meeting and we did VR. We put the guy who will be managing the building in a headset. He’s got his office there and he walked around for an hour, in every single room and basically said ‘this door’s too big’ or ‘we’ve got too many toilets’ and, until you’re inside that building, you have absolutely no idea on the scale of it because people don’t fully understand up to that point. We’ve gone away with a few changes and that’s pretty much it sorted out. Had we not done that, he would go there with about 20 toilets more than he needed and no storage. It took an hour out of our day and that was it and it’s made such a big impact on the build and what they’re going to get. A lot of customers just don’t want to engage on that level, and yet it makes a huge impact to the project.”
Too much data?
Dan Burton of Wondrwall made the point there has never been so much data about the home available to consumers through smart devices and the same is increasingly true for businesses in commercial property. Do they know what to do with it? Can different data systems talk to each other? Unfortunately, many existing software systems used in property were not designed to be integrated into others. Jon Tizard of Select Property Group described how old legacy systems can create barriers. “From a software perspective we do quite a lot of different things. We manage buildings, we build them, sell them and we’re in a world where the technology that’s out there was built a long time ago and they are the market leaders but they are big heavy beasts that are difficult to manoeuvre. It’s a ‘Catch 22’ in the sense that large organisations won’t really want to back a risk in the small people so it’s one of those where you’ve got to really push for change. So, we’re looking at providers who are smaller but, ultimately, are built on the foundations of the next level of technology which allows you to be more flexible, do things easier, report better, integrate better into other things.
“With so much data in so many different silos getting the information from one end to another is very difficult in the old platforms that are 10-plus years old. I think change is probably coming, it will take time for people to keep pushing those small entrants.”
Also raised from a legal perspective was the question of where does the liability and cost of new technology lie. Jill Carey, a dispute specialist at Freeths, said: “The alterations that are needed to put the tech in, if you’re going to make alterations to the building, you might have some tenants who say ‘we don’t want to pay for that. Why should managing this come through our service charge?’ It’s fertile for disputes and trying to avoid that would be to try and have the foresight to look at them at the outset.”
Participants agreed with Heather Staff of Spectre, a software supplier to estate agents, when she said there was ‘proptech fatigue’ among many companies in the industry. Talking about solutions in terms of construction and development is better than serving up a tsunami of startup names and buzzwords which people find impenetrable.
John McHugh, who works in the placemaking team at CBRE, thought “internal collaboration” was vital to be able to sell ideas and new services to clients collectively as a firm. He also emphasised the importance of driving efficiencies in core services such as rent collection and billing before worrying too much about innovation that will change the world.
Jennie Jones, director of construction at Freeths, said a lot of traction could be gained by having a tech champion within a business, someone who “is going to provide the training and drive the initiative forward”.
Vicky Russell at Property Alliance Group said: “At the moment talking about proptech is a barrier. I believe it should be about making things really simple. There’s so much on the market already that people are using such as having a smartphone enabled home, we need to talk in terms of a smartphone enabled workplace. Making systems more convenient and simple will engage people more than ‘look at this shiny piece of kit’ which is more likely to be met with ‘well how much does it cost?’”
Tom Cheesewright, applied futurist, added: “There’s loads of bad friction in business which you should eliminate – all of that manual processing – that stuff can just go; it adds no value. Just let the machine do it. But, actually, there’s bits of good friction. The arm around the shoulder of the client, the conversations and the relationship building – you’re actually going to amplify the amount of time you can spend on that. You’re looking for opportunities in these businesses.”
The role of technology in reducing energy usage was mentioned repeatedly by guests at the Freeths roundtable. Wondrwall cited councils in Salford and Liverpool who were using solar panels on social housing as a way to tackle fuel poverty.
Kier Living is also considering community solar panel installation across a whole residential development to take a neighbourhood off grid and share energy between houses as and when it is needed.
Dan Burton of Wondrwall added: “I think everybody round this room and every company we work for has to look at what damage we are causing to the Earth. We have to look at the impact that these businesses are having and any technology that we can use to actually offset the impact that we’re having on this Earth has to be looked at.”
James Agar of Schroders, a large real estate investor and asset manager, agreed, adding that responsible investment was rising up the agenda for institutions as the value proposition became clearer of technology such as battery storage for buildings.
Getting the basics right
They might not be the robot or Artificial Intelligence assistant that many people think of when they hear the word ‘tech’ but cloud computing, remote and flexible working, a decent company laptop, are simple tools that will empower employees to be more productive today.
Paul Bibby of Freeths explained his experience of moving to the company from a rival recently: “I’m fairly new to Freeths. At the previous business the IT just wasn’t up to scratch and by that I mean you would be trying to work flexibly but you can’t get on the system or it’s dropping in and out. Whereas, it’s great here. So, I can flip open my Surface Pro pretty much anywhere I’ve got a WiFi connection and I’m working. That’s just about having a basic IT system that supports people, which is nowhere near the kind of dizzy heights of some of the tech that is available – that’s just making sure that you’ve got something that actually does the job.”