Leading the digital transformation of the Real Estate sector
We are all aware of the rapid acceleration of digital technology in recent years, and its tremendous impact on all sectors of the economy.
While property and technology often move at a very different pace, most leaders in the Real Estate sector have embraced the commercial uses of technology and have implemented a wide range of initiatives to benefit the Real Estate sector.
A recent report from the British Property Federation (BPF), The LIQUID Report: Leading the digital transformation of global Real Estate, has looked to better define the sprawling landscape of innovations that are coming into play in the sector, and makes a number of recommendations to ensure the UK becomes a leader in this fast-growing industry.
The UK has a strong Real Estate market and technology infrastructure, which are two of the key elements to enable digital transformation of Real Estate for a local market. This transformation will give the UK and Real Estate sector a competitive advantage in attracting inward investment, driving exports and increasing staff productivity.
The report gives examples of the many uses of data or technology in the UK Real Estate market, such as drones, automated valuations and the use of technology in advisory firms. The report also explores the many market-led initiatives.
The good news is that there are a significant number of wider market and Government initiatives directly or indirectly impacting the digital transformation of Real Estate, but the report finds that these are often focused on a specific technology, a particular building type or a specific stage in the building’s life, and are hard to discover and difficult to access from the outside.
BPF’s report concludes with a number of recommendations for action designed to maintain the UK in a leading position in global digital real estate transformation. While the UK market has many strengths, there is a need to “further improve the technology infrastructure and better provide an environment that eases investment and access to capital for real estate digital transformation.” Having said that, the BPF’s main recommendation is for the Government to align existing activities to be more joined up and focused on the outcomes needed.
The BPF points to a number of strategic advantages for the UK in taking a leading position in the global market for property technology, including its capacity for innovation, data infrastructure, market transparency and quality of education, saying: “Across all sectors, increased technological capability will drive efficiency, change ways of working, and increase and improve our connections with our customers, partners and peers. The UK is a global leader in real estate. Technology, correctly embedded and embraced with enthusiasm by the sector, will allow us to pioneer, to challenge and to innovate further.
“The built environment impacts us all. It is technology that will enable us to be agile and nimble enough to reflect the changing needs and demands of the communities, people and businesses we serve faster than ever before. The future of innovation in technology will transform our core relationships – it is up to all of us to ensure that we capitalise on this opportunity and drive our sector forward with the diversity of thought that increased interaction with our partners will bring.”
Nick Leavey, Chairman, Partner and Head of Real Estate believes that in a time where digital transformation is central within real estate, the law needs to keep up: “The planning system will need to be flexible enough so that buildings can be modified to incorporate the necessary infrastructure; the building regulations regime will need updating to cover these infrastructure requirements; and lawyers and other property professionals will need to consider current and future technology requirements when negotiating legal agreements relating to real estate.”
Leon Deakin, Partner, Head of Technology sector, and Head of Employment, comments further, saying: “As we have seen in numerous other sections of our economy, disruptors will inevitably force change and steal market share. As a result, there is increasingly a need to adapt (quickly) or fail. The Real Estate sector is no different, so it is very pleasing to see how the vibrant and innovative technology sector is being embraced. “
Ultimately, digital transformation is essential for all businesses in the real estate sector and very much a commercial issue.
For more information on how technology is impacting the real estate sector, please contact Eve Laws in our Commercial Property team, Nick Leavey in our Real Estate sector or Leon Deakin in our Technology sector.