Fintech startups travelling the entrepreneurial journey of risk and innovation to “unicorn” status have created immense investor value by disrupting existing financial market models and challenging complacent incumbents, but the slow-moving real estate industry is coming late to the game and needs the creative drive of proptech to meet existential challenges. These range from the future of the office and retail to climate change, attendees at this year’s PropTech Innovation Awards heard.
“We need to future-proof our real estate – the pandemic has been a catalyst for something that had already started, and it’s not going away. Proptechs can assist across the entire real estate value chain, they can help speed up processes within a company and even provide access to new business models,” said Jens Wilhelm, executive board member of Union Asset Management Holding AG, in a virtual address at the event organised by Union Investment and Berlin-based GERMANTECH, which this year took the shape of a full-day summit.
In their search for a competitive advantage, companies like Union Investment need to get even closer to the startup scene, he added. “Who would have thought 15 months ago that we would need an app to go to a restaurant or shopping centre? That shows how digitalisation has accelerated during the pandemic. The trend is now unstoppable. Going forward, digital transformation will play a key role in ensuring our properties remain viable.”
There is no shortage of digital solutions on offer. The dilemma now facing established players is which one to pick, according to Andrew Phipps, Head of Business Development, EMEA at advisory firm Cushman & Wakefield.
“What problem can a proptech address and can it save or make money? The winners will be those that address key challenges and come up with answers. Real estate businesses now have a better understanding of what they need and there are clear benefits of working more closely with proptech companies, particularly around sustainability. That will help move them forward,” he said.
Wishibam’s digital retail ecosystem wins PropTech Award
The key objective of the fifth edition of the PropTech Innovation Awards was to find the best digital solutions and business models that address the most pressing issues in the real estate industry in the post-coronavirus world. French company Wishibam won over the jury of seven experts to take top prize in this year’s final round with a digital marketplace that helps brick-and-mortar shopping malls and city centres adapt to the digital world and fight back against the growth of online shopping.
One of the greatest threats to real estate markets and to towns and cities overall are empty streets and empty shops. Wishibam’s impressive technological solution has come up with a way to prevent this.
Christoph Holzmann, jury member and Management Board member at Union Investment Real Estate, said the battered retail industry needs digital pioneers like Wishibam. “One of the greatest threats to real estate markets and to towns and cities overall are empty streets, empty shops, no traffic, no people and no social interaction. Wishibam’s impressive technological solution has come up with a way to prevent this.” Union Investment has a front-row seat when it comes to scanning new proptech startups, but also builds its own solutions and applications around its own properties with its recently established technology spin-off, Union Investment Real Estate Digital. In June 2021, it launched its “Run this place” app as the first step towards a digital ecosystem for commercial properties for all real estate stakeholders. As a key building block with numerous interfaces, the app paves the way for creating digital twins of buildings and gradually adding data.
Run this place and the 2021 PropTech Innovation Award winners show that in just five years there has been an evolutionary leap from standalone tools to digital solutions that focus on the entire lifecycle of a real estate asset, which communicate with their environment and unlock synergies around the interaction between a property’s tenants and users and its surroundings. But while there is no doubt that integrated systems are vital, there are real obstacles to adoption, said Kirsten Falke, group manager for digitalisation, business development and processes at Union Investment Real Estate.
We need to share data so that the end user experiences the greatest advantages.
Fragmented and outdated data is a barrier
One of the biggest barriers is fragmented, outdated or undocumented data. There’s also a big difference between new and old buildings in terms of the availability of information on materials and ESG criteria. While the use of technology on development sites may now be rising rapidly, new construction is just a small part of total supply, Falke pointed out.
A holistic approach is needed, she said: “We must not create silos. We need to share data so that the end user experiences the greatest advantages. But it’s not just about technological barriers, it’s also about changing our mindsets and removing the fear of new technologies. Let’s follow the example of younger generations, who are less afraid of new technologies, and keep the whole value chain in mind,” Falke concluded.
By Judi Seebus