VTS: How to start getting in shape for digital world
Charlie Wade made a strong case at PlaceTech Trend Talk Nordics for companies beginning their proptech journey to invest in their data first.
The UK managing director, of leasing and asset management platform VTS, shared his five key industry trends, four mantras property firms should follow when adopting tech, and three predictions for the future.
Here’s an edited transcript of Charlie’s presentation
For my sins I used to work at JLL, I spent a little over 11 years in the industry living and breathing some of the challenges and pain points that we are now trying to solve. I think that puts me in a quite unique perspective, having spent three years at a software company, to really start to talk about and articulate some of the trends that we’re seeing, feeling and experiencing.
It’s no surprise that our everyday has changed. Our everyday experiences have become mobile, they’ve become real-time and they are in the palm of your hand. It’s arguably the most powerful computer we all own, carried around with us in our pocket, and impacting us in our day to day.
But what about commercial real estate? We run our whole lives on our phone, running about, jumping into several different apps, managing all the things we want to do in a more efficient way. For some, as soon as people walk through the front door of their offices, they bring out the excel spreadsheets and the pen and a paper.’
I don’t quite understand why it has taken so long for the industry to wake up and realise that the staff, the millennials, whatever you want to call the people working in our industry today, they want something a little bit different.
‘I think it’s always important that we do look at other industries to try and get some insight into what might happen in our industry’
The iPhone was released in 2007 and the CEO of Microsoft, at the time, Steve Ballmer, very famously went on television and laughed at this idea of a telephone that didn’t have a keypad.
He’s a widely successful person but he absolutely underestimated the power that mobile technology would have on our everyday. You’ve seen Apple slowly grow over time, now Microsoft’s not done too badly themselves, but their market share got eroded within a 12-24 month period. That sort of change is absolutely going to hit our industry.
- An influx of institutional capital coming from the top of the food chain, there is more and more money coming in to real estate every single day and it’s coming from a very diverse investor base. They are used to trading and working in a more transparent, more real-time world and as that capital comes into real estate so do the pressures and the changes from the top start to impact what we do every single day
- Office sector pressure in the form of coworking, space-as-a-service, and experience. It’s all having a profound impact on the way that we build our buildings, occupy run and manage our buildings
- Retail uncertainty: what is the retail landscape, the CVA’s, the changing consumer, how is retail going to flex and adopt
- The industrial boom, it’s the new darling at the minute, we’re seeing a phenomenal increase in rents and last-mile logistics.
- Venture capital funding into commercial real estate tech has exploded. We founded VTS in 2012, we couldn’t get a meeting with a venture capital firm to even lend us a dollar in 2012. Fast-forward seven years, 12 ½ bn dollars last year went into the commercial real estate
You’ve got this top down pressure with investors changing their attitude and appetite towards transparency, real-time data, reporting, and you’ve got the bottoms up enablement of tech companies coming in to really influence that change.
‘In the middle, you have this perfect storm of the industry and a little bit of unrest everywhere you look’
How does it impact you?
If you are about to evaluate a software, if you’re about to evaluate a tool, if you’re thinking how does our tech ecosystem work, walk away today with these four mantras in your mind.
- Is it cloud-based? All your technologies should and need to be cloud-based. It allows for the integrations, APIs, flexibility, mobility and instant upgrades
- Big data analytics and insight. Data is fundamentally going to change the real estate industry, think about how you get hold of it, what you do with it, how it’s aggregated and how you give it back to the end user
- Consumerisation, the technology today has to be easy to use. You shouldn’t need training or high engagement from the software provider to use their technology every single day, it should be intuitive and second nature
- Mobility We can’t do our jobs if we’re not out there in the market, networking, talking, visiting our buildings, etc. We need to be unshackled from our desks and mobility is one of the most important things I think when it comes to technology adoption and what we’re seeing today
The three predictions
- Structured data will become mission critical to your business. If you’re not focused on your data and you’re not focused on building the basic building blocks for getting your data in good shape, you can’t do any of the exciting things
- Analytics will move from backward to forward looking. The commercial real estate industry will start to look ahead and see where trends and data are going to take us rather than backwards
- Your organisation’s skillset will need to change. People working in your companies today might need to learn some new skills or tool up, you might even be bringing people from outside the industry in too, which is a big trend we’re seeing in the UK
Our mission is to fundamentally centralise the commercial real estate industry onto one standard platform. That in itself is going to create a huge amount of power as people can start to now communicate in standard forms.
We want to bring the supply side of the industry, combine it with the demand side of the industry and ultimately allow people to transact online.
As a business, a little over 9bn sq ft, as close of last year, is now being managed on VTS every single day. At 700+ landlords we’re adding about 280m sq ft every single month. We opened the London office in 2016, and within three years we have 1 in every 3 sq ft in London on the platform. We’ve got nearly a billion sq ft in continental Europe and we’re in 35 countries.