In the modern world, we’re used to new, buzzy phrases being coined, dominating the zeitgeist for a time and then disappearing almost as quickly as they appeared.
However, one new word that has appeared relatively recently but is showing no signs of waning is ‘proptech’. In this post, we’ll divulge everything you need to know about proptech, what it is, what it covers and how it is driving real world change in real estate and beyond.
What is proptech?
Proptech is, in essence, the meeting of traditional real estate markets with the internet of things (IoT) and IT technology. This covers everything from the buying and selling of real estate through to the management and optimization of physical locations. Everything from tech-enabled real estate brokerages, to smart home product manufacturers, to even arguably companies such as Airbnb, that have helped to bring about a vast change in the real estate market, can be considered proptech.
How is proptech changing real estate?
Proptech is impacting every stage of real estate, from the buying, selling and renting of property through to the management and individualized use of indoor spaces.
Many of the aspects of real estate that we now take for granted fall under the proptech umbrella. Before the internet, buying property - be it at a residential or commercial scale - was an often laborious process, involving physically visiting both a real estate agent or broker and the property in question. Now, neither is technically required. Listings can be found online, and can often come with highly detailed information and even 3D maps or video walkthroughs. In some cases, there is no longer a broker or estate agent involved - certain websites enable sellers to post their own listings and manage viewings and offers via an online portal.
After a property is bought, the proptech journey continues. Both commercial and residential real estate markets have been revolutionized by proptech. Two of the most prominent examples of this are vacation rental companies and hybrid/ coworking spaces. Now, residential home owners are able to quickly and easily establish their entire home or a spare room as a space for vacationers and advertise it to thousands of potential visitors on platforms such as Airbnb, while commercial space owners can do the same with their multi-use offices, and then monitor occupancy, meeting room bookings and desk allocation in order to maximize space usage. Activities that, in the past, would have required on-site presence, management company intermediaries, advertising and local partnerships can now be achieved on a global scale in a far simpler manner thanks to proptech.
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What are some prominent protech companies?
As stated above, proptech’s definition has expanded to include a vast array of aspects, many of which are now synonymous with the modern real estate industry, meaning that many companies old and new can be considered at least tangentially related to proptech. Here are a few examples:
- Companies such as Zillow and Purple Bricks have enabled residential home owners to list their homes for sale and manage viewings, or buy property without having to make use of an intermediary real estate agent, a major disruption to the traditional real estate industry
- WeWork and other coworking space companies help both individuals and companies to find office space on a flexible basis, even without physically viewing the spaces, replacing the often lengthy leases associated with office space before proptech rose to prominence
- Airbnb has enabled home owners to advertise everything from purpose-built holiday lets through to spare rooms to thousands of potential bookers globally
- Smart device manufacturers, including Google, Apple and Amazon have all launched devices that fall under the umbrella of proptech, such as smart speakers, video door bells, and others that enhance the wireless connectivity of both commercial and residential spaces
- Companies such as Pointr have been instrumental in bringing the mapping, positioning and navigation experiences that we’ve become accustomed to, thanks to GPS and services such as Google Maps, indoors
- Cisco and others have developed IoT-enabled infrastructure which means that buildings are increasingly able to access smart building innovation without the need for costly hardware installations
How can proptech transform a business?
Proptech’s potential for a business - even those not directly connected to real estate - are almost limitless. For any business with a physical workplace, proptech can have a direct impact, be it via maintenance schedules that can be monitored and adjusted via a digital interface, occupancy analytics can inform property owners of underutilized areas of the building, which can then have their energy consumption tweaked to save money, or information on which employees are likely to be in the office at what time.
For retail businesses, proptech can unlock invaluable insights about customers that can then help enhance the retailer’s efficiency. Footfall analysis and customer heatmaps can help aid in understanding how customers are interacting with the store and highlight choke points and under-utilized areas. Location-based geofences can trigger in-app notifications for users when they enter, exit or dwell within a certain area.
In airports, systems such as indoor maps and navigation can help ensure visitors are guided to the correct gate in the most timely manner, and re-route them quickly and effectively if the gate they’re flying from is changed. In hospitals, staff can save valuable time looking for pieces of medical equipment by leveraging asset tracking, which gives them an interactive map view of precisely where the device is located. Patients can be guided to where they need to go in large complexes, easing the stress of their visit.
These are just some of the examples of the transformative effect that proptech has had on numerous different business sectors.
What does the future look like?
Some areas of proptech are now very well established and, in many ways, the industry standard. Hotel and room booking systems are now dominated by online players, while devices such as smart thermostats and doorbells are being rapidly adopted in both residential and commercial settings. Others, such as indoor maps, are still in a process of rapid adoption.
The future of proptech is increasing interconnectivity across real estate. As more proptech companies appear and new innovations arrive, so too will the synergy between these new systems improve.
Imagine you’re a remote worker, looking for somewhere to do some work and conduct a couple of face-to-face meetings. In the past, this would have involved calling multiple mixed use offices on the off-chance they had free space and taking a leap of faith that the look and feel of the office was what you had in mind. You’d also need to ensure that there’s someone available to let you in at short notice, that there’s enough desk space once you’re in, and that they have the amenities you may need (such as particularly fast WiFi). You may spend some time walking around the space in order to find your designated desk or room, wasting valuable working time. In the proptech era, this is an entirely different proposition, and the very near future will likely look something like this:
- Find a coworking space listed online, and browse the photos and reviews of said space to make sure it’s the sort of place you’re likely to be the most productive in
- Book into the coworking space online, selecting the specific desk or room you’d like to reserve (perhaps after reviewing the occupancy information to select a space that’s likely to be either quiet or a bit more social, with others nearby)
- Arrive at the coworking space and access the building instantly via your smartphone, which has been sent a code enabling you to move through the locked door
- Have the indoor navigation system and indoor map guide you directly to the desk you booked
- When the person with whom you plan to meet arrives, you can send them a guest pass to enable them to enter the building, then share your live location with them to help them find you quickly
- Now together, you both make your way to a specific meeting room that you booked earlier after first having ensured it had all the facilities - such as a large monitor - that you required
This is just one use case. As proptech continues to expand and achieve ubiquity, similarly seamless use cases will eventually cover everything from viewing and buying a property, to managing it, to listing and selling it.