While no two tools are the same, they share a common output: data.
Big data, and the technology driving it, are promising huge leaps forward for the real estate industry. While broad-based data collection requires requisite caution, the eventual outcome is likely to be greater transparency, especially in markets where information remains tightly held, according to JLL and LaSalle’s Global Transparency Index.
“Property is in the midst of a technological leap,” says Jeremy Kelly, global research director at JLL. “The adoption of new technology platforms generates new and more easily-accessible market data, which is key for overall real estate transparency.”
In recent years, progress in improving transparency has failed to keep pace with growing demands from investors and the public. “We’ve gotten used to using technology to track everything from our health to our relationships, and this has raised the bar in terms of what we expect from real estate technology,” says Daniel Mahoney, vice-president, research and strategy, at LaSalle Investment Management.
But significant change is on the horizon. In the last two years, US$6 billion has been raised by so-called proptech start-ups – companies developing technologies dedicated to the property industry. More than 250 start-ups are developing and rolling out proptech around the world.
Take Israeli start-up Skyline AI. The company claims to have the most comprehensive dataset – including stock-market performance, interest rates and financial indicators, commercial real estate analytics, city and district level data – drawing on more than 130 sources going back 50 years. This allows the platform to make algorithm-based predictions around real estate asset performance, pricing, rents, effects of renovation and broader market trends.
Corrigo, a facilities management platform with more than a million users, has developed a platform that is able to predict how many cooling systems will need repairing in a particular city each summer, and to then allocate engineers appropriately to fix them.
New technology platforms and services will give investors, tenants and property managers access to more easily-manageable datasets, allowing for better-informed decision-making processes.
“As these companies mature, proptech has tremendous potential to improve transparency wherever it is adopted,” Kelly says.