The Proptech sector was predicted to have received US$4.6billion worth of funding in 2018. Just 3 months into 2019 and PropTech's impact on how real estate is used, bought, developed, managed and invested is snowballing.
Industry recognition is also hitting new heights - just see the winner of this year's MIPIM Startup Competition, won by a Czech start-up that 'provides an integrated suite of data analytics, smart sensors, and mobile user interfaces to optimise the use of office spaces, and increase the productivity and wellbeing of people in buildings'.
We bring you our predictions of what will be most popular in the PropTech industry for the rest of the year.
1. Property Firms will develop 'Stacks' of PropTech Solutions Encouraging Open Architecture
There are a number of PropTech businesses now in play, each tackling different niches across the industry. As property firms try to get to grips with an ever-expanding playing field, they will start to develop their own collections of 'stacks' of PropTech solutions that complement each other. What this means in reality is that we will see a push towards more open technology, with the most successful PropTech solutions operating not in a silo, but in a stack of like-minded platforms to give property firms the edge.
2. Chief Technology Officers will become important
Traditional models for all property related firms do not place emphasis on the role of the chief technology officer. As firms and start-ups realise the market advantages to be gained from being heavily invested in the PropTech scene, experienced CTOs from other industries are beginning to make themselves available. Expect to see new job roles across the industry with significantly increased remuneration packets available.
3. Talent Brain Drain to Property Industry
As the FinTech industry and more mature tech markets reach saturation point, talented operators are looking around for industries still ripe for tech disruption. As the PropTech revolution gathers in speed, expect to see a swathe of developers and CEOs with proven backgrounds in tech disruption making their mark.
4. Increased funding available for PropTech startups
2019 will bring continued PropTech investment growth, with more deals done and more capital deployed. Traditional real estate firms creating proprietary investment funds to deploy their digital strategy will be one to watch, and expect to see more of a focus on British and European PropTech start-ups as the year goes on.
5. Disruption will give way to innovation
The real estate market remains desperate for more innovation yet tires of disruption. Expect 2019 to being more of the former. Innovation and disruption are similar. Disruption takes a left turn by literally uprooting and changing how we think, behave, do business, learn and go about our day-to-day, however, the best of PropTech innovates upon existing processes and practices, and works to eliminate unnecessary inefficiency.
6. Collaboration and consolidation will increase
There are over 6,000 PropTech businesses around the world. This is unsustainable, but also an opportunity for significant industry collaboration and consolidation. Some start-ups must recognise that they don't really have a viable business model and others will find that they don't have the cash to compete in a ferociously competitive market. In particular, watch out for some online real estate agents beginning to align themselves or even merge completely.
7. 5G to drive enhancement in digital connectivity
2019 will be the year of 5G, driving forward real time digital connectivity from a prediction to a reality. PropTech ventures will take advantage of this, with the industry leaning towards more connected solutions in and on buildings themselves. With arguably a limitless number of use cases, 5G will catalyse, inspire and generate a huge range of new business cases for the internet of things, inspiring a new raft of PropTech ideas and start-ups.
8. Smart building apps shift focus to tenant experience
As the emphasis on tenant experience and occupant comfort continues to drive increased rents and remains a competitive differentiator for commercial landlords and owners, 2019 will see a focus on smart building apps. These will aim to enhance an occupant's journey, build community and provide new experiences inside both commercial and residential buildings.
9.Real estate asset fracking
Real estate fracking involves using technology to break or open up a real estate asset and monetise it in entirely new ways, whether its office spaces, conference rooms, desks or even parking spots. This will be an enormous area for growth in 2019. As more start-ups offering hot-desking, conference rooms and parking reservations emerge, it's likely that soon, digital advertising on the front facades on building and other areas will also become commoditized.
10. Space-as-service platforms will proliferate
The commercial real estate industry is undergoing massive structural change through a concept known as space-as-a-service. Long-term leases and skyrocketing property prices are making it increasingly difficult for young professionals to remain in metropolitan areas. This new business model, epitomised by WeWork and similar flexible office spaces, provides a suite of services that enable tenants to utilise the space efficiently, entails everything from digital connectivity to furniture, fixtures and even the staffing required to operate their businesses.