This autumn European industry leaders paid special attention to how the digital revolution is disrupting and shaping the future of the professions RICS represents.
Discover valuable insights of the future of the profession panels at Expo Real in Munich (Germany), RICS 150th anniversary conference in Nantes, France, and the CEE PropertyForum in Vienna, Austria.
RICS is taking a fresh look at a profession in constant transformation, in order to find new ways to add value to markets, people and the planet. We are listening to all relevant market players in Europe and beyond. To understand better global industry trends and their consequences for the built and natural environment, RICS has been running a global public consultation, but also the organisation is gathering expert knowledge and case studies from high-level industry representatives at important events.
Here are some of the latest insights shared by European thought leaders from the property industry participating in various panels organised by RICS at the Expo Real fair in Munich, the latest CEE Property Forum in Vienna and the RICS 150 anniversary conference in Nantes.
From all those panels one common conclusion comes out: new technologies seem to be the number one disruptor for the built environment sector.
Speakers at the Future of the Profession panel hosted by RICS and PropertyEU at Expo Real 2018 this October outlined that today there are five megatrends to watch out closely for that will change the real estate sector: urbanisation, changing demographics, globalisation, climate change and of course new technology. Those megatrends are all connected and can bring massive changes. According to Noah Steinberg FRICS, CEO of Wing and Chair of the RICS Board in Hungary, "technology is likely to be most relevant one as it will determine what will happen with the other four".
Even more, "after transport, the real estate will be the sector that will see the biggest impact from digitalisation," added Barbara Knoflach FRICS, Deputy CEO at BNP Paribas and CEO of BNP Paribas Real Estate.
According to the latest surveys, the results of which were revealed during The Real Estate Innovation Forum at Expo Real 2018, the necessity of integrating digital change into the corporate strategy is now recognised by almost twice as many companies as one year ago. For instance, the study 'Emerging Trends in Real Estate Europe 2018', which is published annually by PwC and the Urban Land Institute, 85 percent of the real estate managers surveyed agree with the statement that advanced methods of data collection and evaluation as well as digitisation will improve investment decisions for real estate. As in other sectors, the long-term challenges of the real estate industry will be driven by digitisation.
However, in terms of digitisation, the real estate sector is still slightly behind the industry as a whole, as was recently revealed by Deutsche Telekom's digitisation index for SMEs. Seventy one percent of the real estate companies surveyed did indeed report increasing sales through mobile applications, but the real estate companies attain an average of only 52 out of 100 possible points on the digitisation index while the 10 percent of the companies most advanced in digital terms achieve 88 points.
Technology is likely to be most relevant trend as it will determine what will happen with the other four
Noah Steinberg FRICS
CEO of Wing and Chair of the RICS Board in Hungary
Featuring industry-led keynote presentations, the CEE Property Forum held in Vienna this past September with 500 guests attending, was an excellent opportunity to hear sentiment from all the important players in the CEE property industry.
When last year the audience was asked via the interactive Property Forum’s survey on the impact of new technologies, real estate professionals in CEE noted they were not afraid of future technologies and looking at the commercial sector they reported that just because the way we work is changing that doesn’t mean that we would need less office space in the future. However, they perceived emerging technologies as an important game changer.
As a matter of fact, this year one of the most expected and well attended panels was about the future of real estate, and it dealt with the introduction of new technologies to the real estate industry as the main trend impacting the sector. According to experts, there are in particular two lines of business that are deeply affected by technology: valuation and workplace solutions.
The automation and digitalisation of valuation (as well as the entire investment process) can pose a threat to valuers and agents. Javier Kindelan Williams FRICS, CEO of EMEA Valuation & Advisory Services at CBRE, EMEA, explained how the skills and competencies required from valuers are changing with technological developments (such as Automated Valuation Models (AVMs), Big Data, Artificial Intelligence and Blockchain). As was also explained in the RICS publication called “The Future of Valuations.” As technologies improve, AVMs and smart contracts will automate the process based on protocols and standards, saving time and costs. New algorithms move AVMs from low-risk valuations with sufficient comparables towards more complex valuations for all property types. It may be that for certain low-risk valuations, all that will remain of the valuation process is the client, the smart contract and an AVM. For more complex valuations, the entire process will still be followed, with the role of the valuer as an objective and impartial judge remaining crucial.
Related media coverage: Property Forum
The concept of the ideal office space has changed tremendously in recent years. New ways of working and new technologies are giving landlords a run for their money and that’s why professionals should rethink what makes an office attractive in 2018 and what it will take to secure new leases and keep existing tenants happy in the years to come.
Some of the take-aways and recommendations from the conference organised by RICS and its partners in Nantes on 20 September, entitled “If real estate becomes mobile?” and attended by 1,000 guests were:
To untap the potential of those new trends disrupting consumers and real estate businesses, we need to be ready to design innovative real estate strategies and solutions.
In recent years we have seen in the retail sector how e-commerce giants, such as Amazon or Alibaba, represent a challenge for physical retailers.
As Patrick Dugué FRICS, President and founder of Dugué said, "we used to live in a time when consumers went to shopping centres to go to their stores, today they come directly to them.”
However, in a digital world, physical retail is not in danger, if the commercial real estate of tomorrow is able to adapt, be flexible, combine digital and traditional retail, put forward the customer experience, show the products and not only "Buy!".
In fact, e-commerce stores start opening physical stores. It began with Apple in 2001 when the computer giant opened its first physical stores in wealthy suburbs of Virginia and California in the US. It took more than a decade for another computer giant, Samsung, to follow suit and launch its ‘experience stores’ across the US and Europe. Now there is an avalanche of online stores going offline. On the face of it, this is good news for worried retail landlords, both in terms of retail space being filled and the creativity that online technology can bring to shopping centres and the high street.
In the future, heading to the store may be like going to the movies instead of watching at home. You go for the experience.
With regards to the office sector, according to experts from JLL in France, speaking at the conference: the ingredients for the working space of tomorrow are: a flexible and flexible on-demand work force, coworking spaces or spaces open innovation; a collaborative work environment that grows to innovate, take advantage of digitalisation and big data, intelligent real estate, an agile business culture, new talent that adapts to new challenges, and special attention to well-being and a sense of belonging to a community, as explained by Marie-Laure Leclercq De Sousa, Directrice Agence France, JLL .
After transport, the real estate will be the sector that will see the biggest impact from digitalisation
Barbara Knoflach FRICS
Deputy CEO at BNP Paribas and CEO of BNP Paribas Real Estate
Head of Media & Communications, Europe
Laura has worked for RICS since 2007 and she is in charge of developing and maintaining a proactive media relations programme to raise the profile and credibility of RICS in continental Europe. She ensures accuracy and consistency of communications in cross-cutting messages to different audiences, provides support in the preparation of material for key delegates and dispenses newsworthy information to media and PR agencies.