The commercial real estate sector is moving towards greater proptech adoption, says a new report.
More firms are applying proptech across a broad range of business functions, according to the Altus Group CRE Innovation Report 2019.
There has been a shift in proptech adoption and investment. For the first time, most of the 400 global commercial real estate executives surveyed for the report, fully recognised the disruptive impact of proptech and its potential to solve their challenges.
Across the board, firms are using emerging technology to automate processes internally, while also taking advantage of platforms to streamline lending and enhance the speed of transactions.
Having a clear technology and data strategy help firms to more quickly respond to increasing market pressures.
Among main findings in the report are:
- 61% of CRE firms are using or already trying out online lending marketplaces, with 23% using them in a significant way
- Eight out of 10 CRE firms have a Chief Data Officer or equivalent senior executive who oversees their organization’s data strategy and data governance, almost double the 44% four years ago
- 60% said their firms are using spreadsheets as their primary tool for reporting, 51% for valuation and cash flow analysis and 45% for budgeting and forecasting.
“The combination of new market entrants, new technologies and changing demographics have created disruptive models within CRE. This means significant opportunity for firms who rapidly embrace innovation and proptech to streamline their systems and processes to reduce complexity,” the report concludes.
“Staying on top of the disintermediating drivers will help ensure CRE executives are well-positioned to leverage the latest available technologies to their advantage.”
In contrast, firms holding on to traditional ways of managing their business through using spreadsheets will face competitive challenges, says the report.
“The continued use of spreadsheets poses serious challenges for organizations as it stalls efficiency in data administration and management and increases the risk of human error. The lack of integration in spreadsheets also prevents firms from taking full advantage of the value-added insights their data can provide.”
However, over the past two years the CRE industry has experienced a significant acceleration from awareness to adoption of both emerging technology as well as the utilization of data analytics, the report states.
“A growing number of CRE firms are now starting to actively apply proptech to drive efficiency across a broad range of business functions.” However, CRE firms continue to be selective when it comes to adoption with many not recognizing the potential opportunity and benefits of some rapidly emerging technologies, it states.
“While many in the industry are still watching and waiting, CRE leaders are now taking a more active role in innovation. Of those who have adopted solutions to solve their business and data challenges, many have chosen to implement advancements such as AI and automation
“This higher level of engagement and investment has the potential to enable the development of solutions that are better equipped to solve the unique challenges of the industry. It will also help CRE firms let go of traditional practices that are holding progress back, while preparing them to more quickly adopt the next emerging technologies and use them to their full potential.”