The pace of change in property is undoubtedly getting faster. The way real estate is being built, managed and valued is being digitised which means that sooner or later many of the current job titles will disappear. Property Forum reports from MIPIM where a discussion held on the Colliers International boat provided a deep insight into the future of the property business.
There is often a huge gap between what advisors are selling and what clients want. In order to better serve clients, aligning ourselves with their needs is key and so is technology, Csongor Csukás, Executive Director of International Property Management at BNP Paribas Real Estate explained. He believes that 80% of what we do today will be industrialised in the future, that’s why his company’s value-minded strategy is building on the remaining 20% that will still require a human touch. He also emphasised the importance of transparency and sharing information.
Josie Nash, the Business Development Director of Infabode Ltd, a real estate information platform, shared her experience on how over this past couple of years companies have become more willing to share. She believes that no one should pay for something that is already up on the Internet, but in the world of real estate, where people are used to every piece of information and every service being available only for a fee, most were initially not too open to the idea of something being free. Luckily that is changing now.
Dan Hughes, the Founder of Alpha Property Insight agreed that some data should be given away for free and there is a need for sharing.
On the other hand, however, dangerous protectionism can be, some data shouldn't be given away.
Panel members agreed that culture and habitat change when people see the benefits of technology. According to Jack Sibley, Head of Innovation & Technology Strategies at TH Real Estate, there are structural reasons (such as long lease terms) for why it has taken so much time to bring innovation into real estate, but these structural obstacles can be overcome. He believes that data will help us better understand cities and make the process of underwriting assets much easier.
Michael Molloy, the Founder of Dashflow for CRE highlighted that over 90% of asset underwriting is completely speculative and only 5% of it materialises in deals, so digitising the process of underwriting significantly increases efficiency.
Leases are getting shorter, so investors will need to get used to valuations operating with probability, rather than exact values. The variables in the valuation process are also changing, especially in the field of retail. As more and more shoppers only visit shopping centres to look at products and do the actual purchase online, investors need to accept that valuations will be based on footfall rather sales volumes, Josie Nash added. Csongor Csukás went as far as saying that retail is becoming a media business.
Retailers will need to get used to paying for exposure, not for being able to sell things in the store.