During 2017 the real estate industry became increasingly involved with ‘PropTech’; in 2018 it will become committed. The difference being that in 2017 many people learnt the vocabulary of PropTech and became good at saying all the right things, whilst actually doing very little about putting any of it into practice.
In 2018, the innovators will start to steal a very considerable march on the laggards by rethinking their business models, investing in technology and digitally enabling their employees. They will grasp that, yes, they (like every other business) are in the technology business, and that the real estate industry is no longer about real estate. Real estate is moving inexorably from being a product to a service industry. And that changes everything.
The most successful real estate companies will develop three areas of their business in particular, largely with the aid of technology, but also in combination with enhanced human skills and capabilities:
First they will understand exactly how their properties are operating, at a very granular level, and in real time. Through sensors and the IoT they will enable their properties to ‘talk’ and in doing so will enable them to be run much more efficiently and effectively.
Secondly they will understand, again with the help of technology, how people are really using the spaces and places around them, as opposed to guessing and working on hunches. This will enable them to configure their properties for maximum utility and thus raise occupancy and occupier satisfaction levels.
And thirdly, they will learn exactly who is occupying their properties. As opposed to only knowing the person who pays the rent very well, they will begin to treat every single person who enters their property as a customer. In an increasingly #SpaceAsAService industry, providing a great UX, user experience, is what will define an owners Brand, and it is through a great Brand that the greatest Value will be created. To build a great UX though you need to truly understand your customer.
All of this will be hard, and a challenge for the real estate industry. But the companies that are committed to making it happen will be handsomely rewarded. The gap between the best and the rest is set to grow.