New business models, maturing technologies and an unprecedented level of user insight are redefining how property will operate and generate value.
In the last twelve months ‘Proptech’ has assumed its place alongside Fintech as one of the most exciting areas for venture capitalists – in 2017 alone, investment in the sector jumped 28% to around $3.4bn, according to CB Insights. Investors are being attracted by the new possibilities that digital tools and insights are bringing to the once slow–moving property business. This year, I believe we will see a rapid rise in the number and value of these developments and projects across the property industry, driven by three market factors in particular:
1. Meet Generation Z…and their high expectations
Generation Z are entering the workforce with new ideas about workplaces. Born between the mid-1990s to early-2000s, these sophisticated users of digital services expect the same responsive, personalised experiences in their homes and offices. Property developers, owners and operators hoping to acquire occupants or talent are having to rethink how they embed digital technology to meet Generation Z’s ever-expanding expectations and grow market share.
2. Rise of the digital business model
Today’s property business models must possess a smart technology dimension or risk being irrelevant. Flexible workspace giant WeWork is a great example. They’re using a digital property strategy to produce more inviting, responsive spaces and securing better returns on investment. Their success underlines wider investor confidence in Proptech and crucially, places greater pressure on developers and operators to provide efficient, profitable spaces.
3. From Internet of Things to intelligent assets
Thanks to IoT devices, user behaviour is finally out of its black box. Networked sensors offer real-time insights into how people and organisations are using their homes and workplaces, allowing owners and operators to determine whether an asset is operating effectively across its lifecycle. For investors and developers, they can help to shape an asset’s entire proposition around the user experience for the first time. The technology is affordable, but property players need to ‘design-in’ digital services from the outset to unlock this information. Arup used their SoundLab simulation technology to help design the working experience at White Collar Factory, which shows how digital tools can precisely define the new user experiences owners require.
“The property industry has an exciting opportunity to improve our cities, producing sustainable and enjoyable spaces.”
Improving our cities
If you were designing a property business tomorrow, a digital-first mindset would likely shape your entire business model and supply chain. You’d want to know how your assets are running, who’s using them, and why they’re used in the way they are. Beyond the obvious commercial advantages, this new approach heralds a shift in property where buildings adapt and improve to reflect changing needs.
In a larger sense, digital property will improve our cities, producing adaptable buildings that meet higher standards of environmental performance, energy usage and create enjoyable places to live and work.
Article courtesy of ARUP
Rick Robinson: Leads Arup’s Digital Property and Cities business, advising cities, infrastructure operators, developers and investors on the use of technology to increase value, performance, and user experience.