The Asian property technology (proptech) adoption is on a tear.
After years of being ignored on the sidelines, major real estate companies are beginning to see value in rethinking core processes and business models using digital innovation.
A total of 180 real estate specialists — accounting for more than a third with assets valued at over USD 1 billion — took part in the survey in August 2020. Thirty-nine percent of respondents were from Hong Kong, 26% from Singapore, and 12% from mainland China.
The report showed that 70% of real estate companies are now scaling up their proptech investments in response to COVID-19-driven demands. Big data analytics (55%), artificial intelligence (42%), business process automation (32%), and the Internet of Things (32%) were top areas of investment over the next five years.
“Our latest survey results unearth a major shift towards proptech adoption in our region,” says Bernie Devine, the regional director at Yardi Systems. “Change was underway well before 2020, but COVID-19 has heightened the urgency and amplified the risks of inaction.”
Metaprop, one of the world’s largest early-stage proptech venture capital firms, predicts that proptech innovation will deliver USD 205 billion of new value to the global real estate industry over the next five years alone.
“Real estate leaders are rolling out technology to support more frequent and accurate reporting, deeper data analysis, and technology that underpins safety and efficiency,” Devine explains.
Asia is also catching up with the West, with 30% saying that the region was leading — up from 12% three years ago. Even though 35% of respondents admitted that they were trailing the West in tech adoption, it improved on 2017’s 56%.
“There’s a growing perception that Asia is closing the gap with the West. Location shapes perceptions more than any other factor, with just 6% of respondents in mainland China believing that Asia lagged the world’s leaders,” says Devine.
While proptech adoption is increasing, there is still some ways to go. One reason is that many real-estate companies are family-owned and do not readily see the value proposition. In the survey, 56% admitted to relying on Excel spreadsheets for their work processes.
“But as we start to achieve far superior levels of efficiency and insight from more sophisticated software, digital will dominate. We expect the property companies that seize the lead now will establish an unassailable position in the market in the years ahead,” Devine concludes.
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