Developments in PropTech were Evaluated
Opinion Piece Oct 02, 2020
Digital transformation and new business models in real estate need to be closely monitored by public authorities and the private sector alike.
Taking place in almost all industries in recent years, the digital transformation has come to the real estate and construction sectors late as they are working with relatively more conventional methods. “Real estate technologies” refer to the innovations seen in real estate, the world’s largest asset class, and represent new business models. Real estate technologies, also known as PropTech, cover many subjects such as building materials, construction processes, immovable purchase and sale activities, mediation, valuation, architecture, mobility, maintenance & repair, workplace management, logistics, retail, energy efficiency, smart cities, smart buildings and so on. Digital transformation has led to many important developments in these sectors such as robots working in constructions, remote-controlled construction equipment with artificial intelligence, constructing walls with 3D technology, fast modular building construction methods, digital markets for real estate and building materials, building animation with augmented reality, managing plant and building management processes with software and new technologies, turning the fixed immovables into data-generating and easily-controlled assets with smart buildings and sensors, and so on. In short, we can say that real estate has come out of the building and construction sectors and turned into a service product with technology.
Business opportunities of PropTech
PropTech brings forth ground-breaking developments in the market and leads to countless business opportunities. We live in a period where we can monitor construction from unmanned air vehicles, conduct safety, fatigue, and efficiency analyses through the barcodes on safety helmets, carry structural irons with unmanned cranes, control the energy, air conditioning, temperature, air, smell, and safety alarms of thousands of rooms with a single app, deploy smart robots in logistics warehouses, purchase thousands of tons of construction materials on e-commerce platforms, or rent a construction equipment thousands of kilometres away online. All these developments will no doubt break the rules of the construction and real estate activities globally in a very short time, and technology will have a more key role in all this. PropTech is on the agenda of many countries today. The United Kingdom, Scandinavia, Israel, Germany, China, and the Netherlands are working hard to become the base of this technology. In the US, Amazon makes great investments in prefabricated house production and smart home technologies, for example. Microsoft and Samsung, the two giants in their industry, have joined their forces for PropTech in smart homes.
The ecosystem needs to be expanded with the right investments
Today, a significant portion of the world’s contracting services are carried out by Turkish companies. And we also have a significant human source with international experience in real estate such as architects, civil engineers, construction supervisors, and contractors. However, technological developments in the construction, like the ones I have mentioned above, can also deal a big blow to the competitive power of our country. Similarly, building materials and construction activities make the biggest contribution to our national income. The new digital trade platforms, markets, new applications, and business models can also reduce this share in our national income. We will also need technical equipment, software, and franchises to implement these technologies in our country and have to pay substantial amounts for their import. Therefore, digital transformation and new business models in real estate need to be closely monitored by public authorities and the private sector alike, and the ecosystem needs to be expanded with the right investments. So, I believe that creating a PropTech road map in our country and expanding the ecosystem is of utmost importance at the moment. With good planning, our country can become an important regional power in PropTech.
Founding and Managing Partner of Next Proptech Venture Capital Investment Fund Bekir Yener Yıldırım