Conversations with innovators in the industry revolve around three recurring categories that property companies will not ditch in a downturn.
As economic winds blow colder, these are the three core areas that real estate innovators are prioritising:
Not a surprise really, the incentives are coming in strong now from regulatory headwinds to avoid fines and gain permits, or investor tailwinds to swerve the infamous stranded-asset scenario.
New materials, energy monitoring, recycle and reuse solutions that can help push a portfolio along the desired greener path will remain in play. Who pays is another question. The scale of the sums of money that must be spent on retrofitting the world’s estate to net zero are in the trillions.
Future of work
Don’t yawn, it’s important! Yes, there’s been a LOT (too much) said and written about it, but correcting building design and service level around the new way people work is not an overnight job. The fastest corporate occupiers and their landlords will take at least five years to solve it. How the large commercial developers manage the risk of getting the product wrong while moving into unchartered territory will be interesting to watch. Similarly, the future of retail has not gone away, despite the even lengthier conversation around e-commerce. Property’s exposure to retail is substantial, and there is growing belief that it can be revived as a sector through better experience and community engagement.
Arguably the most interesting area of the three as it’s broader. This includes how best to present data and its meaning; AI and machine learning software to automate those mundane tasks that back-office teams hate doing; research tools that collate information into user-friendly maps that speed up the selection of sites; planning and design software based on gaming engines that produce the best options for a site in hours when it would once have taken days or weeks to narrow down. And much more, depending on your ability to identify your pain and find the best cure.
Fix up, look sharp
Running through all these are cross-cutting items such as hiring the right people to run your scouting programme for finding solutions in the first place. Then you have to encourage adoption of tech within your organisation, the internal sell is arguably more important than your purchase of shiny new kit.
As real estate values take a hit, development slows and the cost of money rises, will you be taking the foot off the innovation gas or powering through to emerge in a better position on the other side? Whom you partner with might be one of the answers: accelerators and VCs, universities and local digital networks can all help elevate your understanding and improve your vision across the oft-confusing landscape of real estate technology.
For the rest, the nice-to-have technology, there will be a pause in spending, tech startups will flounder and fail as demand softens. Time remains for firms not in the right space to pivot and position themselves in sustainability, future of work and business efficiency. Or find a new horse to ride.