Technological innovations in the real estate and construction business, known as PropTech, are rapidly driving the whole industry forward. This phenomenon is ushering in new business models and systems for streamlining property services. End users and service providers are excited, but are property owners ready to make the necessary investments?
From an investment perspective, systems benefitting end users can seem like nothing but extra costs with no added profit — at least in the short term. Admittedly, systems that make properties more efficient generally do require a longer investment horizon, as they can often take decades to pay for themselves.
However, maintaining the value of the investment requires that properties are up to date and meet the needs of tenants and consumers as well as requirements of sustainable development. On the other hand, investments can generate revenues and additional cash flow, for example, from advertising monitors and applications, package delivery systems and other new business models.
PropTech can gather strategically valuable data on customer movement and behaviour. All that remains is to put that data to use. It is also important to make sure that the right to privacy is sufficiently respected. In the case of personal data processing, this means taking the requirements of the GDPR into account when developing new business models. When selling a property, buyers will not only be interested in brick, mortar and cash flow, but also in making sure that the rights to PropTech software and data are transferred as a part of the deal.
PropTech is now pushing property investors, developers and tenants alike to evolve. One estimate is that within five to ten years, properties and technology will be so closely linked that the term PropTech itself will be obsolete. It is now high time to grasp the opportunities provided by technology.