Cretech NYC

Max Beard left the conference with a sense of optimism about the future of the industry. Credit: CREtech

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Top takeaways from CREtech New York

Max Beard BW Photo Background xinComprising the who’s who of the property technology world and leading figures in traditional real estate, CREtech NY saw over 2,200 industry leaders and innovators come together for two days to network and discuss the pressing issues we face and how innovation can help solve these challenges, writes Max Beard.

It was fantastic to be in New York networking in person again and there was a real sense of excitement and pent-up demand, as for many this was the first time back in the city at an event since you-know-what.

Overall, the sentiment was optimistic and it was fascinating to hear leading names across both the real estate and proptech industries discuss their current and future technology plans in what is an uncertain economic environment.

I learned so much while I was there, and the top three things I will be taking with me back to London are:

1. Shift from growth opportunities to operational efficiencies

With such pressing global economic headwinds having knock-on effects everywhere, including the ongoing situation in Russia and Ukraine, the energy crisis, and the global monetary policy situation, the real estate industry needs to do more with less.

Real estate owners and operators are looking for opportunities to drive down operational costs as interest rates and inflation take hold of their budgets.

Many are reducing growth opportunities and swapping to operational expenditure reduction through innovative solutions, such as the switch to green energy and smart building management of HVAC systems – as well as data.

This can prove challenging. However, for some it is a huge opportunity – as Laura Hines-Pierce, CEO of Hines said: “Let no good crisis go to waste” –as downturns are often the best times to innovate and develop our future strategy and innovation opportunities.

2. Differing global government regulation around ESG

There was overwhelming agreement that not enough was being done in the US regarding environmental regulation at a governmental level compared with Europe.

With half of the world’s wealth tied up in real estate ($340tn), environmental regulation pegged against different scoring frameworks, such as the EPC, or energy performance certificate in the UK, the opportunity for startups to help real estate meet these targets is enormous and the main growth opportunity.

Therefore, the correlation between future global government regulation and good businesses that solve these energy and climate predicaments stand in good stead to watch their valuations soar as they solve the issues of the day. As Raj Singh of JLL Spark commented: venture capital must be investing for the longer term, with seven to 10-year horizons.

3. Proptech market consolidation and scale

Real estate has been traditionally slow to adopt tech solutions, and while the industry has woken up to the need to change this, fundamentally for real estate owners, occupiers, and managers there is such a vast array of proptech companies all offering a slightly differentiated product. It can be hard for many to see through and ultimately pick a company that they want to work and thrive with.

Many commented over the two days that a period of market consolidation would be key for the industry to reduce some of the noise and help owners, occupiers and managers deploy the best technology across the sector, as using great technology is a strong client and employee retention tool.

As Sach Diwan of La Salle Investment Management discussed, data is intellectual currency and the stakeholders with the greatest insights will be able to make the best live and long-term decisions for their buildings and their customers.

Are you worried this is all taking too long? Fear not!

CRETech New York saw a keynote from world-famous architect Bjarke Ingels, who offered some real insight and optimism about the future of proptech and innovation in real estate.

Ingels proclaimed that true change and adoption will take time as some of the greatest buildings in the world have taken the most time to build, citing his favourite building, the Grundtvig’s Church in Denmark, which took 28 years to complete. Made of Danish yellow clay, the project saw many of the masons join as apprentices and complete the Kirke as grand masters.

I’m bringing that optimism with me back across the Atlantic with a sense of excitement about the potential solutions we’ll see unfold over the coming years.

Max Beard is proptech investment analyst at Knight Frank

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