By: Madhusudhan G., Chairman & MD, Sumadhura Group
Proptech is poised to revolutionise the real estate industry as we know it today. Driven by changing technology and consumption patterns, the term broadly refers to technological innovation in various aspects of the real estate segment. The emergence of the market was brought about by the convergence of technology and real estate sector, the largest asset class in the world. With its cutting-edge technologies such as augmented reality, smart buildings, big data mining, 3D printing and cryptocurrency, proptech ventures are now equipped with the technical competence to enable energy consumption monitoring, creating and simulating interior designs, smart solutions for services such as parking, waste management and transportation. This is expected to improve the performance of organisations and benefit all stakeholders concerned with real estate market right from buyers to investors.
According to a JLL report, India is one of the most dynamic markets for proptech and it tops the list of countries in the Asia-pacific region in terms of a number of deals made in the segment. Since the last 5 years, deals and investments amounting to USD 928 million has been made in the sector and this too is amongst the highest in the region. The proptech revolution hit Indian markets in mid-2000s on two fronts; first the residential sector then commercial. The huge potential of the residential market propelled funding for the proptech industry and also resulted in the development of a standardised system in the real estate markets, online housing portals etc. With a rapidly expanding commercial real estate sector, new players have entered the markets who aim at increasing the transparency in the sector in terms of data processing, as analytics providers etc.
Today, proptech is no longer a niche segment in the real estate sector, as enterprising entrepreneurs and businessmen have realised the potential of the largely untapped market. Investors are increasingly focussing on cost control and revenue maximisation, which can be easily achieved by aspects of proptech such as end to end process management software, and overall consolidation of the sector which would provide developers with a technological advantage. This would in turn eventually translate as economic gains for the organisation. Some of the prominent proptech trends to watch out for in the India include:
- Blockchain Technology
While blockchain tech has already proved its mettle in the fintech industry it also holds great possibilities for the real estate sector. With data in the sector being increasingly digitised particularly with regards to property transactions, blockchain offers both buyers and developers additional security against possible fraudulent practices.
- Augmented BI Tools
This mainly involves the application of analytic tools in order to determine value, make forecasts and gather useful business-related insight on a variety of aspects. These include maximisation of revenue, elimination of operational inefficiencies and improving general performance of the organisation. The rise of technology has enabled traditional BI tools to progress and even predict customer preferences from existing data in some cases.
- Internet of Things (IOT)
Loosely defined as the inter-connectivity of everyday objects of even people the Internet of Things (IOT) is set to revolutionise the real estate sector. Home automation devices which forms an important part of the IOT is an indispensable aspect of efficient utilisation of urban spaces. They use artificial intelligence coupled with sensor-based technologies to offer an array of services in connection with the home environment.
- Virtual Reality
Virtual reality (VR) not only enables a prospective buyer to visualise the property even before its completion but it also facilitates a 360-degree tour of the property and its surroundings within the comfort of one’s own home. Due to its highly immersive and engagement-based nature of functioning VR is slowly becoming a prominent part of real estate, architecture and interior decor today. Several start-ups that offer these services in VR have emerged in tech cities across the country.
- Chatbots & Customer Relationship Management (CRM) software
The chatbot technology backed by the development of artificial intelligence assists realtors in generating leads and converting them into customers. Several eminent developers use chatbots to provide 24x7 services to potential customers. These are programmed to identify the needs of the potential customer and handle enquiries and in some cases even conduct follow ups. In addition to this CRM software automates the process by which an organisation keeps up with the customer preferences and needs. The software is even capable of running, tracking and following up on campaigns for the organisation.
Proptech today is shifting into a necessity in the real estate segment and is no longer a novelty factor in the market. The advent of technology in the real estate sector has not only made things more efficient but has also increased the transparency in the system. As the real estate market continues on its upward swing, entrepreneurs and businesses who harness technology in their organisation will reap the long-term benefits post the consolidation of the various aspects of the proptech sector. Nevertheless, proptech still remains a trend whose full potential has not been explored in the Indian markets. We are going through a time of rapid innovation, and companies that view technology as an opportunity to enhance, or even revolutionise, their existing processes will more than likely emerge with competitive advantage.