Innovation and disruption in the real-estate market
In a world where technological innovations are launched one after the other in rapid succession, it is important for the sector to select and implement the right technologies. The more traditional world of real estate faces major challenges in this view.
Welcome Arne Allewaert, Managing Partner at the investment fund Amavi, Davy Demuynck, CEO of ION, and Steven Lambert, former owner of Spacewell. They will discuss the technological innovations in the real-estate market and explain their vision of the future.
Arne, you are Managing Partner at the investment fund Amavi. How do you see your company’s role in this new evolution?
Amavi Capital is a European PropTech Fund (EPTF) which invests in companies that connect the traditional real-estate world and the new PropTech world through innovative technologies. Today we are seeing more and more innovative developers own and manage buildings. By capturing, analysing and combining the data generated by these buildings with public data, we gain relevant insights that can result in a continuous improvement process. These technologies also enhance the customer experience, a concept that is virtually unknown in the real-estate world. Moreover, there is a general consensus that PropTech is essential in the search for an answer to climate issues. However, at the moment, the traditional world of construction is not yet sufficiently open to innovations.
And Steven, as the former owner of Spacewell, you have many years of experience. In your opinion, how can data on existing buildings help to reduce costs and increase efficiency?
We are seeing that the real-estate sector is on the move: previously the focus was on process automation, facility management, maintenance, cleaning, and so on. Today, we are seeing a shift towards data. With that data, digital bridges are being built between the real-estate world, architects and construction companies, but also between property managers, workplace managers and energy managers, for example.
Davy, as CEO of ION, a young and dynamic player in the real-estate sector, do you believe that innovation is the key to differentiation?
I do. I believe that the real-estate sector is relatively traditional because it is very fragmented. For example, the largest Belgian property developer controls three to four per cent of the market, followed by a number of developers with two or one per cent, but the rest is much smaller. Few people know about PropTech and how it can significantly increase the efficiency of the construction process. The construction speed and efficiency can be given a boost by using the right technology to map out the various aspects of the process. There are some good initiatives in this respect.
Amavi’s investment in Gbuilder seems to confirm this trend. Can you elaborate on this, Arne?
We have indeed invested in Gbuilder, a Finnish company that creates 3D environments from 2D plans. This enables potential buyers to see their future apartment in 3D, walk around in it and choose the finishings. This significantly boosts the efficiency and customer-friendliness of the entire process.
We have also invested in Shayp, a Belgian company that has developed an automatic water leak detection system for buildings, which can detect leaks down to appliance level. As a third example, I would like to mention our investment in a Dutch company, Finch Buildings, an expert in modular wood constructions. They produce wooden modules that are then used to assemble buildings. This is an evolution that we have witnessed mainly in the Netherlands and Scandinavia, but it is also beginning to take hold in Belgium.
Recently, we have also seen a trend towards consolidation, whereby various PropTech companies join forces to present a more holistic product range.
Time never stands still. Steven, how do you see technology evolving in the real-estate sector?
I would like to illustrate this with an example. Last year, Spacewell set up the ‘Port of Antwerp’ project around a maritime campus which hosts start-ups, corporates and even the navy. There we noticed how to tackle construction and maintenance problems quickly and efficiently. After all, hundreds of quotations are drawn up as part of a single construction process. They need to be compared and data has to be exchanged about them. Yet eventually, nobody looks at that data anymore. However, these BIM and 3D models can be used as a stepping stone for each supplier to showcase their own digital folder with 3D models, technical specifications and documents.
Back to Davy for a moment. Do you see this development as a lasting one or rather as a trend that is doomed to disappear?
I am convinced that technology will be the new normal within ten years, also in the construction and real-estate sector. This is evidenced by the fact that even the largest technology players, such as Google, Amazon and Apple, are currently focusing on this. These companies are launching numerous initiatives in the real-estate sector and are acquiring companies that offer the right technology. Today, Google is building entire villages in Canada where people can live at a reduced rental rate on condition that they agree to have a house full of sensors. These sensors earn Google data - and therefore money - because the data can be sold to manufacturers, suppliers, engineers, agencies, etc. Amazon recently made a major investment in America, where people can simply configure a prefabricated house online. The house is made in the factory and a month later the modules are delivered and the new house is finished within a very short timeframe. I am really convinced that this is the future and that traditional players who fail to adapt will simply be wiped out by their competitors.
Arne, what do you think? Is the biggest competition in the real-estate market still coming from small, fast-growing real-estate players?
No, it is clearly coming from technology. If the classic world of real estate does not start moving towards technology, then technology will start moving towards real estate. We really need to be aware of that.
And what do you think, Steven? Do you see any other players entering the real-estate world?
I think we can expect energy managers in the real-estate sector soon, for example. I assume that in a few years’ time, we will be heating buildings in a different way. Thanks to data capture, the energy manager will be able to manage our energy more efficiently, so that the end consumer will ultimately pay less. Or the energy manager may decide to reduce the wattage of the charging station for electric cars from 100 to 60 watt to lower the energy consumption. This does not affect the driving performance of the car but since it reduces the energy consumption, it also lowers the energy costs. These are innovative incentive models that allow players who were not in real estate before to enter this world.
Finally, Davy, will all of this lead us into a more efficient and therefore cheaper world?
I assume so. Just think of the ‘one-price policy’ that is gradually replacing the practice of charging rent and then adding a share of the costs, gas, electricity and internet. With this new formula, efficient measurements are carried out so that the overall price is ultimately cheaper than if all installations and all subscriptions were charged separately. And that is certainly a trend that we will also see in Belgium in the future.