by Brianna Crandall — August 9, 2021 — The Urban Land Institute (ULI), in partnership with global law firm Goodwin, has published a new report that lifts the lid on how property technology (or “proptech”) is increasingly revolutionizing the real estate industry.
Proptech: Changing the Way Real Estate is Done consolidates and analyzes data collected from a survey of 200 ULI members from around the world who have direct involvement with their companies’ historical and recent adoption of proptech. Eighteen in-depth interviews were also conducted with senior real estate executives whose companies have adopted new technologies and are planning more.
Ed Walter, ULI Global CEO, commented:
Historically, real estate has not been regarded as the most technology focused of industries, but that is changing, and changing fast. Proptech has undeniably become essential to companies to maintain a competitive market position, with technologies being integrated in all business areas, including, meaningfully, providing the tools to address climate change and meeting ESG commitments.
“This report drills down into how and in what areas companies have, in the last three years, integrated proptech into all aspects of their business, both strategically and throughout their operations, and their plans for the next three years. The cloud, IoT, mobile devices and 5G have all opened the doors on the potential for innovation, but it is the application of this technology from the end users of proptech — real estate companies — which will shape the transformation of the industry over the next three years and beyond.
Minta Kay, chair of Goodwin’s Real Estate Industry Group and co-head of its PropTech Group, pointed out:
Proptech is not only shaping the industry but has become a critical driver of competitive advantage in a competitive marketplace globally. It has challenged the historic status quo and is driving impactful market change. This report underscores that the adoption of digital strategies is progressively growing in different business segments within companies in the industry, including in management and financial streams, design and construction, leasing and tenant relations, wellness and climate change. Technology is demonstrating that it has the power to impact the nature of our built environments.
Additional insights from the report:
- The vast majority of companies are already experiencing the powerful impact of technologies integrated across their businesses, with 80% of companies noting the positive impacts on operations and services, and 70% experiencing a positive impact on decision-making and finances.
- Data Analytics, Property Management and Portfolio Management are sectors benefitting from the highest impact of recently adopted new technology, with Capital Raising lagging thus far.
- Interest is shifting dramatically to Data Analytics, Project Management and Climate Change, with companies indicating these will be key growth areas for their proptech adoption over the next three years.
- The pace of proptech adoption is set to increase over the next three years, with the leading companies pursing multiple strategies to remain ahead of the curve, including direct investment in technology companies, investment in venture capital funds and in-house technology development.
- Asked about goals in partnering with and/or investing in technology companies, 40% of companies are developing proprietary technology tools, 31% helping screen for high-impact new technologies, and 16% diversifying overall investment strategy.
- Overall, only 15% of companies do not have plans for future investment and growth in technology adoption.
To download the full report, Proptech: Changing the Way Real Estate is Done, visit ULI’s Knowledge Finder and sign in.