Last year, the RICS commissioned insight paper ‘The technological revolution and the future of residential property’. In order to address some of the key points in the report, the Women in Property (WIP) association (South East branch), in partnership with Dentons, organised a proptech seminar. Angelica Donati, the paper’s co-author and CEO of international property development and investment company Donati Immobiliare Group, talked us through the different types of proptech, from artificial intelligence and machine learning to blockchain and beyond.
As those in the industry are all too aware, there is a lot of buzz about “deep tech” and “big data” (nouns are no longer sufficient, it seems!). But it’s important to cut through the noise if we are to digest and appreciate the real and immediate possibilities.
Proptech is in the mainstream. In 2016, the proptech market was worth $2.6 billion. In 2017, this jumped to a whopping $12 billion (no, that’s not a typo). There is an abundance of proptech events in the real estate calendar. And with giants such as Tesco partnering with property and estates management software firm iSite – not to mention JLL’s proptech investment platform, JLL Spark – there is clearly an appetite to capitalise on proptech’s power to maximise real estate portfolios.
But what exactly is proptech? The RICS describes it as “all aspects of innovation and how it impacts the built environment”.
Ok, so that seems fairly straight forward. But what does it look like in practice?
Blockchain, simply described as a distributed database of sorts, can be used for anything from implementing smart contracts to collecting payments. The challenge is that with any deep tech follows a deeper well of data, so there is an ethical question concerning how it’s all governed and protected.
That brings us nicely on to big data. Why ‘big’ you may ask? Well, because it refers to high-volume, high-velocity, high-variety information assets. It reduces all the data that might drive better decision making into a single platform that, in turn, offers insight and direction that you might not have otherwise had at your disposal. The Internet of Things (IoT) works hand-in-hand with big data. It can be described as a giant network of connected things that maximise real estate optimisation, utilisation and efficiency. With the IoT – and the big data that spills out of it – there are cyber threats to consider. Hackers are waiting for their opportunity to abuse your networks. One weakness and it could be game over.
Finally, it is impossible to talk about proptech without mentioning AI, IA, ML or DL. Confused? Don’t be. Here’s an overview of each.
AI (artificial intelligence): “The ability of computers to show forms of intelligence”
IA (information architecture): According to the Information Architecture Institute, IA is “the art and science of organising and labelling websites, intranets, online communities and software to support usability”
ML (machine learning): “A current application of artificial intelligence based on the idea that computers are able to learn for themselves through experience”
DL (deep learning): “An approach to artificial intelligence focussing on a subset of machine learning tools. It aims to solve real-world problems through mimicking our own decision-making processes”
Unfortunately, this is a mere blog and I’m unable to share how you might start using all of the above (what a great excuse!). I can, however, share the main takeaways from the seminar. Firstly, deep tech is an untapped opportunity in the B2B space. If you are going to embrace one segment, focus on AI and DL. This is where the opportunity lies according to the RICS paper. These tools should help inform intelligent architectural design and management moving forward. Bear in mind occupier trends – there is now a renewed focus on the user experience, urbanisation, sustainability, flexibility and talent attraction. So, if it’s going to be implemented, proptech needs to support that discourse.
Here is my final thought: deep tech can open new revenue streams as well as help businesses extract value and improve efficiency. If you don’t look at tech, your competitors will… so don’t just join the conversation, start planning how you are going to make the most of the opportunity without leaving yourself too vulnerable to the associated risks.