MIPIM PropTech | One of the biggest challenges facing those driving proptech is getting the development world to truly embrace innovation. Focusing on the end user could be the answer, writes David Martin.
Mid-sized entrepreneurial developers who can afford the luxury of being different embrace tech more readily than the big developers working on large redevelopment projects. “Innovation means change and that is hard, especially for businesses that are doing well”, said Lisa Picard, chief executive of US-based Equity Office Properties. Not the most resounding of rallying cries to an industry that arguably needs a big kick up the facilities basement, but Brookfield’s Ric Clark is less sure that a problem even exists: “Actually the industry has been good at looking at how to use tech for value”, he says. Adding: “It is a new focus for the industry, but we have been looking at how tech can improve the bottom line and user experience.”
However, many developers are still drawing a distinction between the bottom line and the user experience. Something that asset and property managers have brought closer together. That said, Chris Grigg, chief executive of British Land, recognised there has been a “marked shift over the past eight years [since he joined the property industry] in the way people think about the customer”, something he believes is down to technology.
Picard believes the industry is still spending “lots of time on the performance of an asset, but not enough on the end user”, suggesting that it needs a change to the operating model that is more suited to the occupier. This can be done by thinking about what is happening to customers and getting to know what tech advances they are following, according to Boston Properties’ Owen Thomas.
Perhaps the most concerning statement of the whole conference came from British Land’s Grigg though, and it is one that both sums up the issue developers face, and arguably demonstrates a lack of real desire to embrace change. “Property is a long cycle business and it can take 10 years from buying a site to the delivery of a building. We are having to make decisions up front, but technology has developed faster since those decisions were made.” In making this statement, Grigg was clearly highlighting the damaging effect that a long-winded planning process can have on the ability of developers to innovate.
One highly influential delegate disagreed with Grigg’s viewpoint, arguing it sums up why big developers aren’t going to embrace innovation: “To me this shows an unwillingness to want to change. I can’t honestly believe that there are no opportunities to tweak some designs and take the chance to innovate and invest in implementing new technologies.”
Once again then we come back to this question of whether or not developers have the drive to genuinely change their business models. There is still a feeling that maximising profit and a hesitation to take financial risks over project costs in order to speculating to accumulate, will hinder the development industry from being the proptech champions the sector desperately needs them to be.
Meanwhile, look to China if you want to see who is setting the pace when it comes to integrating technology and property, due to the reliance on social apps, according to Guy Bradley, chief executive of Swire Properties.
Bradley, whose Hong Kong-based company is actively developing across the Far East, said: “Do not ignore China when it comes to tech and proptech. China had low levels of computer ownership, but leapfrogged that phase straight to smartphones. People run their lives via WeChat, a social app that allows you to do everything from chat to peers, to book and pay for everyday products and services, so it is vital to be on that forum just to be seen.”
David Martin is managing director of property specialist communications agency 26 Letters PR and was attending MIPIM PropTech in New York.