Real estate needs to level up its skills and mindset with the technology sector to transform the built environment
A new report released today by top 100 law firm Cripps Pemberton Greenish, has found that real estate companies are crying out for partnerships with tech start-ups to help them keep up with the pace of change. In fact, 90% of the survey respondents said that they would welcome pilot projects or joint ventures with technology companies to advance the development and use of technology within the property sector.
The report draws on the views of a group of CEOs, directors and management executives, all currently working in property or technology companies. The most striking findings were:
- whilst boards of property companies recognise the importance of innovation, they are wary of failure and this slows their uptake of technology,
- there is a general lack of in-house specialists who can identify and deliver successful tech projects, and
- there is a big communication gulf between property companies and the tech experts who advise them.
The report’s key findings in more detail:
A shift towards the end-user experience: Real estate businesses cite that their current tech investment is focused on operational efficiencies. 86% of survey respondents revealed that they are focussing tech-investment on operational and back office functions, rather than consumer-facing products. Providing a better end-user experience is considered more of a long-term play.
Changing mindsets and skillsets: The biggest barriers to tech adoption are culture and mindset. Boards recognise the importance of innovation but are wary of failure. Whilst 45% argue that the main block is using tech with legacy systems, 48% of survey respondents confirmed that there is a distinct lack of digital expertise within their businesses to identify and deliver projects that benefit end-users.
Creating connections between the real estate and technology sectors: Fragmentation of the real estate sector is holding back wider tech adoption. Investors want to see a variety of solutions that deal with different stages of the property lifecycle. There is an appetite to develop solutions through collaboration with the tech industry on pilot projects and joint ventures.
Commenting on the findings, Mike Scott, Head of Real Estate at Cripps Pemberton Greenish, said:
“The results from this panel of experts are clear. Real Estate companies in the UK are finding it difficult to innovate on technology and it’s holding the sector back from achieving its full potential.
“The early adopters in Real Estate who have been prepared to engage are gaining sizeable advantages, whereas the large number of investors and developers who continue to operate on traditional models are falling behind.
“It’s abundantly clear that these new tech solutions are our future. But the two sectors need to work together better if we are to see the widespread adoption of the wonderful, innovative technology projects we all want to be a part of. Without this collaboration, we risk missing out on significant value for not just the companies involved, but also the end customer.”