Gavin Gleave CEO of fu3e on How proptech can help to mitigate risk during challenging times
Some thought leadership from Gavin Gleave, CEO of fu3e.
‘The UK real estate sector, like many others, has not escaped the impacts of challenging economic times. Analysts at HSBC have indicated that real estate firms face a “precarious” situation in the near to medium term, with falling asset prices, rising levels of inflation and looming refinancing risk.
In addition to facing macroeconomic risks, the commercial property sector is adapting to the changing nature of demand following the pandemic, adding to the wider challenges of operating in the industry today, alongside siloed sets of information and a lack of integration between technology and processes. But can those in the sector best react and continue to be successful during challenging times? This is where proptech (property technology) can help developers to unlock the power of data, and in turn, better manage risk.
A time of challenge Traditionally, managing property projects was time-consuming, often complex and highly reliant on manual input. The pandemic certainly ignited efforts in the real estate industry to digitally transform.
When it comes to risk, funds, owners, developers and consultants are missing valuable opportunities to identify volatilities through the use of data. The traditional way of managing property developments falls short – particularly when it comes to mitigating risk.
Anticipating new dangers is as important as identifying changes when it comes to existing threats. In any case, both are difficult to achieve with the siloed processing of data. Effective risk management also depends on being able to view data in real-time and in a period of uncertainty, it could not be more crucial for the success of projects.
Key stakeholders in property projects are often time-poor and need to be able to check on a project status quickly in order to make key decisions and communicate with those around them in an informed way.
Reducing risk through the power of data Data can play a key role in reducing risk today in the property development market. Cloud-based platforms can both revolutionise processes and reduce risk through improved visibility. The aggregation of data inputs from a variety of sources brings information together and delivers a single source of truth so that all those involved in a project can have end-to-end visibility of project data.
The current economic conditions are affecting the financial viability of developments, so developers are fighting to constantly adapt in order to remain successful. This is achieved by keeping a close eye on costs at all stages of a project and flagging concerns immediately. Another area of risk lies in human error and manual data entry issues can be minimised through the integration of proptech solutions with financial and accounting systems. The added benefits of integration include time savings, as well as fewer data discrepancies.
Consolidating data leads to improved financial analysis, reporting and decision-making, which is vital from both an operational and regulatory point of view. While other aspects of property development involve risk, financial risk will always be a ‘make or break’ moment for any project. From an investment perspective, the performance of projects can be racked against targets. Those insights can then help to provide evidence of an organisation or project’s future trajectory to potential investors.
Leveraging the right PropTech solution In 2019, KPMG found that a significant portion of decision-making made by developers, investors and advisors in the property sector is not data led. While that gap will have reduced in the past few years, there is still a lot of work that needs to be done in the sector to enable more data-informed decisions to be taken. For too long now, the real estate sector has been slow to implement proptech solutions to help organisations operate their businesses more efficiently.
Slow adoption is preventing sector growth at a time of economic uncertainty, so now is the time for the prevailing winds to change and to look to technology as a viable industry solution to managing risk. Property funds, owners, developers and consultants need to look for the proptech solution that fits their needs with the right tools to help them transform the management of project developments.
Furthermore, proptech solutions enable property investors to better manage ESG risk and embed ESG principles into every stage of the development process. In the UK, laws were passed in 2019 to achieve net zero and this will require every sector to play their part and decarbonise, so proptech solutions need to be an enabler for meeting ESG goals.
The future of the real estate sector The real estate sector is at the cusp of a proptech revolution fuelled by data. During this period of economic uncertainty, it couldn’t be more important that those in the sector look to technology as a means to become more efficient and successful, to remain one step ahead of the competition.
Inaugural PropTech Connect conference takes place in London on 6th & 7th September 2023
Press Release – London, 16 August 2023 – Europe’s largest PropTech event will take place in London on the 6th and 7th of September.
PropTech Connect will host leading organisations and cutting-edge technology solutions in the real estate sector for a two-day event at the InterContinental London — The O2. The conference will deliver a revolutionary conference experience designed to act as a catalyst for industry change, bringing together over 200 speakers and more than 3,000 visitors — including over 600 C-Suite guests
Attracting everyone from VC’s to real estate pioneers, entrepreneurs and innovators across all real estate pillars, the conference aims to deliver actionable insights with a focus on driving innovation. Attendees will learn about the next generation of real estate technology solutions from drone technology to water recycling solutions, and see all this come to life at the event’s Smart City exhibition.
Adopting a content-first approach, PropTech Connect will bring together the most insightful and inspiring speakers, with appearances from dozens of industry leaders including: Kevin Cardona, CIO & Head of Strategic Partnerships at BNP Paribas Real Estate, Daniel Wishnia, CDTO at Aroundtown SA, Lisette van Doorn, CEO at Urban Land Institute, Samantha Kempe, CIO at IMMO Capital, Jeff Nielson, CTO at Brivo, Lisa Picard, Partner at Sway Ventures, Miguel Nigorra, Partner and Head of Europe at real estate technology VC, Fifth Wall, Bas Van Galen, CTO at Blackstone-backed Mileway
Other companies attending include Cushman & Wakefield, CBRE, Amazon, Barratt Developments, BlackRock, British Land, Brookfield Asset Management, Citibank, Colliers, Costar, DoveVivo, Google, Greystar, Invesco, J.P. Morgan, JLL, Landsec, RICS, Rightmove, Airbnb, Lendlease and Schroders.
CEO of Proptech Connect, Matthew Maltzoff, said: “We live in an incredibly exciting time. The sheer range of technologies available to real estate companies means the industry is unrecognisable when compared with the turn of the century. When it comes to deployment of funds, environmental concerns and consumer choice, this is a sector that is transforming itself and the way we live in a very short space of time, and PropTech Connect is a glimpse of this future all under one roof.”
Miguel Nigorra, Head of Europe for Fifth Wall, comments: “Proptech is no longer a ‘nice to have’ for real estate owners and operators. They are embracing technology to mitigate operational challenges, create new business opportunities, identify new revenue drivers and address cost challenges related to labour, material procurement and construction. At the same time, at Fifth Wall’s European office, we are very keen to invest in Climate Tech to help decarbonize the built world. Real estate is both the largest asset class on earth and the largest environmental offender, that has traditionally invested almost nothing into Climate Tech. We are looking for startups and solutions to address every aspect of the carbon problem across the entire asset lifecycle.”
Cem Savas CEO, Plentific, added: “The industry’s progress has been remarkable, and this event will further explore how we can further accelerate tech adoption across real estate. Together, we can shape a future where technology plays a pivotal role in transforming the way we interact with real estate and create lasting value for all stakeholders. At the event, I am eager to delve into the decision-making process of ‘Build or Buy,’ exploring the best approaches to engage proptech solutions effectively. As we embrace new advancements, the collaboration between real estate companies and proptechs will be crucial in creating a more connected, sustainable, and innovative technology ecosystem.”
Andrew Stanton is the founder and CEO of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder and editor of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.