The property industry is evolving more quickly than ever, in large part due to the rapid adoption and development of new technologies.
But some in the sector are slower than others to adopt new ways of operating, and the market is also softening, applying pressure industry-wide.
Just how ready is the Australian property market for the inevitable changes that lie ahead?
Operators adopting new technologies to add value
The recent report ‘Accelerating the Innovation Agenda’ by Altus Group notes that across the commercial real estate industry, operators are attempting to create greater value by improving process efficiencies, better data analysis, and new applications that “streamline” businesses.
Over the last 24 months in particular, the property industry has seen a surge in the number of technology-driven innovations that are transforming traditional ways of doing business.
The report contains the results of surveys with 400 large commercial real estate operators at both senior executive level and from back office.
The organisations surveyed were from across the world.
86% say IT is creating cost and operational efficiencies
Of the respondents, 58 per cent said they were investing in and using technologies to help them make money, as opposed to using technology just to save money.
86 per cent of the large organisations that responded said they were seeing cost and operations efficiencies from information technology investments.
84 per cent said they were seeing improvements in data quality from their information technology investments.
84 per cent said they were seeing improvements in deal transaction cycle times from their information technology investments.
And 81 per cent said they had been able to improve their portfolio visibility by investing in information technology.
58 per cent says they are now using technology to help them make money, not just to save money.
Yet some fail to see the potential of major new technologies
However, some operators still seem to remain in the dark as to the potential of some cutting-edge technologies.
The report states, “The survey results also indicate, however, that CRE executives do not fully recognize the potential for some new technologies to have game-changing industry effects.
When presented with six rapidly emerging disruptive technologies… a minority of survey respondents recognized them as having the potential for significant disruptive impact.”
The results were startling, with some alarmingly high numbers believing technologies like artificial intelligence and blockchain will have “little to no impact”.
- 38 per cent said artificial intelligence and machine intelligence will have little to no impact on how CRE business is conducted.
- 42 per cent said Big Data and Predictive Analytics will have little to no impact on CRE.
- 55 per cent said augmented and virtual reality will have little to no impact.
- And 62 per cent said blockchain technology will have little to no impact on the CRE business.
“Experts in these fields have warned of the disruptive impact that these technologies can and have already made on other industries.
“While most CRE executives do not currently see these emerging technologies as having disruptive potential, these new innovations and the companies that are creating them have arrived and are rapidly gaining the attention of those in the industry who are closely assessing its impact and how it can be turned into opportunity.”
“Acting now will be critical…”
With a recent report by AT Kearney and The University of Melbourne – ‘The Untapped Value of Analytics’ – showing that organisations that use data successfully in their businesses make 60 per cent more profits than those who are slow to uptake new technologies, the Altus Group numbers appear to paint a concerning picture.
Though many CRE businesses recognise the importance of utilising new technologies to their full advantage, many are ignoring the fact that technology will also create fundamental and transformative changes to the way the industry operates.
“Acting now will be critical to ensuring an organization’s ability to be competitive in the future,” the report concludes.