Time to step on the digital accelerator again
By Mike Scott, partner and head of the real estate team at legal practice Cripps Pemberton Greenish
Digital acceleration, once a buzzword in strategy papers, has become a living reality in the wake of our current public health crisis. The property industry has struggled at times to identify genuine problems that need solving, but as the impact of Covid-19 has challenged our most vulnerable systems and sectors, good theory in digital innovation must be thrown into practice.
Preparing for future shocks
The launch of BNP Paribas and Fifth Wall’s £90m Real Estate Technology Fund at the beginning of October gives us clues as to where investors continue to see untapped potential.
The fund is geared towards solutions in ‘digitalisation, the low carbon economy and agile working’. E-commerce, building access controls and even robotic office cleaning are all technologies that have taken on new relevance. These are now being seen to offer advantages for businesses needing to adapt quickly in uncertain times and prepare for future shocks.
In 2019, Cripps Pemberton Greenish reported on a survey of real estate and tech leaders to explore why, historically, there has been a hold up in tech adoption. Bringing the property and tech worlds together can feel like mixing oil and water in terms of approach to risk.
It is through closer connections between the two industries that the true benefits of tech are being found. These benefits may have become clearer in 2020 but new partnerships are still to be formed.
Having recently raised an investment round of their own, industry partnership is something close to Orbital Witness’ heart. Orbital Witness is a start-up at the intersection of property and legal technology. Their platform builds a risk rating system that allows property professionals to quickly understand priorities, like key legal risks and threats to liquidity or value.
Co-founder, Will Pearce, puts a lot of their early success down to the team’s ability to gain support from a cross-section of the industry.
“The property industry is a complicated web of different professions” he says, “and collaborative partnerships are necessary for a start-up to effect real change.
“In our early days we benefited from being able to experiment through initiatives like Mishcon de Reya’s MDR LAB, HM Land Registry’s Geovation incubator, and through winning investment from real estate luminaries such as JLL and Investec.”
When it comes to industry adoption and acceleration, bringing together digital skills and partnerships is key.
So how can property companies figure out next steps in terms of their own digital acceleration?
● Strategic focus: Boardrooms need to understand what technology can do for their businesses across the financial, social and environmental agendas. Tech needs to become a regular part of critical thinking. Successful adopters will bring digital expertise onto their board and to decision making processes
● Skills: The property industry needs to bring in (and support) the right skills to help interpret the huge amount of incoming data; expertise is needed to understand how tech can enable delivery of strategic goals
● Partnerships: Tech and real estate need to invest time educating each other. Joint ventures and incubators, as experienced by Orbital Witness, can connect property and technology to identify the real estate problems that tech can help solve.
Fifth Wall’s managing director, Roelof Opperman, reckons that “in a world that’s dynamically changing, you can no longer view investment in technology as purely a one-time thing” but more of “an offensive R&D strategy”.
The acceleration and development of the property industry will occur through companies willing to invest the time and effort in relationships with the technology sector.