23 Feb 2017
The property sector and, in particular, the commercial property sector, will become increasingly Darwinian over the next ten years and only service providers that are willing and able to adapt will survive. That is the view of Managing Director at Fixflo Rajeev Nayyar. Below he provides his thoughts on the changing role of technology in the property sector over the next two to ten years.
All of the technologies mentioned in this article are already available and it is a question of when, not if, the interaction between property professional, occupier and space is rebuilt.
Service evolution: Two-year outlook
It seems that every week a new product is launched that will “disrupt”, “innovate” or even “disruptively innovate” the property sector.
For all the hype, Excel and email remain the most widely adopted of all technological tools in the property sector. So what are we to make of the new band of solutions that are garnering headlines?
To date there has been little impetus for commercial property agents and managers to embrace change. In contrast to the relentless and cut-throat competition seen in the residential property sector, barriers to entry (largely helped by imperfect market knowledge) have, for the time being, preserved the status quo in the commercial market.
Over a two-year horizon widespread technology adoption will be a by-product of changes in market dynamics. The need for increasingly flexible lease arrangements will continue as the shape of UK Plc continues to move from large corporate occupiers to small and medium sized employers.
This simple trend will have a material impact across the property sector. Flexible floor plates will command a premium, flexible leasing structures will become a necessity and property managers will increasingly be relationship managers to ensure that they are alive to the changing needs of occupiers to protect their clients against voids.
At the same time, the demands on property and facilities management will continue to rise as service levels are benchmarked against consumer experiences with global super-brands, such as Amazon, rather than property services peers.
Greater turnover of tenancies and a more demanding tenant base will force process enhancements, particularly in respect of workflows, to provide a better level of service through agency and property management in a more streamlined way.
That said, the underlying processes, although tech-enabled, will not be markedly different to those we have today.
Service revolution: Ten-year outlook
Over a ten-year horizon, I believe that the entire property lifecycle will be technology first and every property business will, at heart, be a technology business. While there are always “unknown unknowns” this is likely to be achieved through the widespread adoption of technologies that are already available in the market.
Examples you may have heard about are virtual reality viewings, occupier interaction via chat bots, big data site identification, modular construction reducing build times and costs, and machine learning feeding into better design and construction for future builds.
While each element is interesting and potentially adds value, with PropTech the sum of the whole is greater than the parts.
Take our specialism, repairs and maintenance: how could technological advances, such as 3D printing, augmented reality and the internet of things be pieced together in a tangible and useful way?
At present, if something breaks in a property, it requires a human, typically an occupier or possibly somebody working for the managing agent or landlord, to identify what has gone wrong, report it and track that communication for a specialist engineer to be instructed.
The contractor then ascertains the parts required, contacts a manufacturer or distributor to secure the parts and finally returns back to their property to fix the original issue.
In ten years the divide between planned and reactive maintenance will disappear and we will move to a model of continuous building maintenance underpinned, and in large part, serviced by technology.
Buildings will monitor their health at both an aggregated and at a component level through the widespread use of sensors, which are designed into new stock and retrofitted into existing stock. Triage will be automated and appropriate instructions seamlessly sent to the right contractor.
Those contractors will be able to print components on site or to collect them from central 3D printing workshops and once on site their augmented reality glasses will display manuals on demand.
Once works are completed, maintenance cycles, warranties and if appropriate insurers will all be automatically updated. In short, a complete maintenance workflow carried out before a component fails and with no operational impact on occupiers.
What will this mean for property companies?
If, like me, you view technology as a flywheel to allow people to do what they are best at (relationships) then for companies that easily adapt to new ways of working technology is a liberator. Unshackled from their desks and from process management property professionals will be able to add value through creative problem solving and bespoke advice.
For those that don’t the world will be a more challenging place.
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