18 Sep 2019

The Proptech Evolution event was held on the 10th September. This was another in the AREF Education and Training Committee’s highly successful FORT series – an ongoing series, covering Funds, Operations, Regulation and Tax. This event was kindly hosted by M&G Real Estate in their state-of-the-art auditorium and proudly sponsored by Citco. The event was simultaneously streamed live to Edinburgh, where Aberdeen Standard kindly hosted our members north of the border and to Jersey, where Bedell Cristin kindly hosted in St Helier. All delegates had the opportunity to submit questions to the moderator using slido.com.

This summary could not capture all the interesting detail of the event but merely aims to give a brief overview of the key elements discussed.

Andrew Miller, Head of Real Estate Technology for Citco Client Fund Services, welcomed everyone to the event and gave a brief insight into the technological changes he has witnessed and the apparent need for real estate to catch up.

Keith Phillips, Director, Membership & Enterprise, at The Investment Association then introduced the IA’s Velocity initiative. This acts as a fintech innovation hub, actively supporting early stage fintech firms as they develop. With around 150 organisations already part of Velocity, they cover the entire spectrum of technology servicing the fund management industry. Following the IA’s extended partnership with AREF earlier in 2019, they are now seeking to incorporate proptech also.

Nick Wright, Senior Director and Strategic Consultant, CBRE then gave his keynote speech, starting with a fascinating and somewhat sobering video on The World in 2040, highlighting the distinct challenges we collectively face in the built environment. You can view the video on slide 16 of the presentation.

Drawing on surveys carried out by KPMG and CBRE themselves, Nick discussed the changing business environment, CEOs’ planning priorities, including an apparent shift of focus to retain employees and how this applies to the use of proptech. His slides quantified the investment in proptech already and demonstrated how this is growing quickly. That said, there is seemingly a lack of vision and/or strategy still.

Nick suggested the proptech industry doesn’t help itself either, as there is some confusion over the large number of companies in the space, offering various aspects of proptech.

His speech was an excellent introduction for the panel session. Nick moderated the panel, which consisted of Alex Bray, Head of Alternatives & Property Systems, Aberdeen Standard Investment; Oliver Farago, CEO, Coyote Software; Hannah Prideaux, Business Development Director, District Technologies Ltd; Sebastian Abigail, Senior Director, VTS; Enrico Faccioli, COO, Gyana Ltd.

Nick moderated the panel session, taking questions from the audience in London but also Scotland and Jersey too, via the slido app. Nick was interested to hear from the panel how the multitude of proptech solutions could get into real estate firms and kicked off this session by asking the panel what barriers they faced trying to get their proptech into real estate fund management. It was clear that the main issue seems to be a lack of dedicated resource to look for and assess technological solutions. This lack of people and budget extends to the process of embedding technology once purchased. The proptech firms find it difficult to ascertain who the right person to talk to is; the fund manager, the COO, the CFO or someone in the tech department?

Alex emphasised that given the number of tech solutions, fund management firms need to invest in an operational data layer, to bring everything together. He believes there is so much data available from various solutions, but it tends to sit in silos currently.

The conversation moved onto how proptech firms can demonstrate return on investment (ROI). Members of the panel suggested that potential buyers of proptech need to consider desired outcomes, rather than simply asking software companies ‘show me what you can do’. They believe it makes for a more productive approach when considering technology solutions. They also need to think of the ‘softer factors’, not just the direct linkage to ROI. For example, more efficient working practices improving the wellbeing of staff. Furthermore, it was also suggested they consider the negative ROI implications of not investing in better technology. Interestingly, before adopting new technology, it also seems there is a need for fund managers to standardise the current, somewhat disparate, data set first.

The question ‘why now?’ was considered, with the panel advocating that the changing times and the current trends we are witnessing, many of which featured in Nick’s opening video and presentation, were driving the real need to act. Some of the panel said they found adoption of their technology was often driven by the need to address specific issues within a real estate company. It was also noted there was greater competition for tenants as it is now easier for many to move to other premises. Another reason for why now was suggested simply as because others are doing it, hence the need to remain competitive. Again, it was stressed by some that the integration of various systems was key.

In summarising the day’s event, Nick reflected on what he found to be the three key takeaways. First, real estate fund management firms need to establish a clear strategy when considering the adoption of software solutions. Second, there is a need for dedicated resource to be provided to act as the focal point and lead that strategy. Lastly, there appears to be a need for education on both sides; for the fund management firms and for the aspiring proptech providers.  

Attached are some answers to questions submitted on the day through slido that we did not have time to include at the event.

AREF would like to thank all the speakers and panellists for making Proptech Evolution so insightful, all the delegates for making it such a success and M&G Real Estate for being such excellent hosts, and to Aberdeen Standard Investments and Bedell Cristin form hostying in Edinburgh and Jersey respectively. Special thanks are also due to Citco, for sponsoring another of our FORT Series events.

Our thanks also to all the proptech firms that exhibited in the foyer both before and after the auditorium session and helped make this such a valuable event for AREF members. Those firms were:

CBRE

Coyote Software

Demand Logic

VTS

DashFlow

Gyana

District Tech

 

 

Download Presentation Slides:  Members can download the slides, by clicking here.

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Author

Ed Protheroe

Ed Protheroe

Strategy Consultant, AREF

Ed Protheroe consults for and acts on behalf of AREF on several Board initiatives around communications, strategy and business development. He has over 30 years of experience in the fund management industry. Before founding Parkview Capital Limited in Feb 2017, he had a senior franchise management role as an Investment Director, co-Head of Equities Investment Specialists at M&G Investments and prior to that, he was Head of Real Estate Investment Specialists at M&G Real Estate. He has also been Head of Research at a boutique broker and a senior pan-European equities fund manager and unit trust board director at Aberdeen Asset Management. He started his career at Morgan Grenfell Asset Management.