COVID-19 has accelerated proptech adoption, making it a business-as-usual tool for the commercial property sector.
So says a new survey of the UK commercial real estate industry, Accelerating the Pace of Change, from law firm Clifford Chance and proptech investment firm, Concrete Ventures.
The report says the global Covid-19 pandemic created an unexpected tipping point for proptech and accelerated its use in the sector.
Now a business-as-usual tool
“The results of our survey show that proptech will play a critical role going forward. It is now a business-as-usual tool, with applications throughout the industry regardless of size, sector, function or previous level of adoption of tech.
“Covid-19 has rapidly outdated traditional approaches to transactions and accelerated the need for and use of proptech. The pandemic has put a rocket under the property industry’s adoption of technology. With the genie Out of the bottle, the industry’s approach to transactions can’t and won’t be the same again.”
Report’s main findings
The 23-page report details five main findings:
- In with the new: There is an overwhelming increase in the use of technology, and whilst traditional methods will remain, their importance is broadly decreasing
- A people business: Relationships will continue to be the key source of transactions
- Augment to prosper: Traditional approaches will be supplemented by new tools, including alternative data sets, drones and the application of machine learning to help gain new insights and opportunities
- Understanding the value: Areas such as digital twin technology are gaining traction, but there is a significant gap in understanding of its potential benefits
- Adoption on the up: Deployment of legal tech in transactions is expected as part of the new normal – the widespread adoption of video conferencing, electronic signatures and digital platforms is only going to increase.
All senior executives and investors surveyed all agreed that following COVID-19, there will be an increase in the use of digital signatures to streamline and speed up transaction execution and virtual meeting rooms.
Seven out of 10 believe that real estate investment listing portals will grow in importance or remain the same.
The transaction process showed the strongest enthusiasm for the deployment of new technology. The overwhelming view is that there will be more use of technology going forward and less paper.
Almost two out of three respondents thought that artificial intelligence/machine learning assisted drafting tools will increase in importance.
Investors were particularly supportive of platform-based online transaction workflows with 93% expecting an increase.
The top three barriers to the adoption of technology are the ownership of data (52%); cybersecurity risk (48%) and unclear value delivery (41%).