More than half of mainland Chinese property companies are likely to increase their budget for proptech by as much as 30 per cent in the next two years, reflecting their changing attitudes towards innovation amid greater risks brought on by the coronavirus pandemic, a survey has found.
A JLL survey of 230 proptech companies, real estate and professional organisations found that more than 55 per cent were likely to raise their allocations for proptech between 10 and 30 per cent, compared to 37 per cent of firms that planned to increase their budget by 10 per cent in the previous study in 2018.
The study found that a more open attitude is likely to lead to more collaboration, a departure from the previous approach of huge investments in acquisitions or in-house R&D that typically face high failure rates owing to limited technology, talent or capital resources.
Get the latest insights and analysis from our Global Impact newsletter on the big stories originating in China.
As more Chinese property companies allow greater collaboration, costs associated with building trust with technology firms will be lowered, said Gavin Morgan, JLL’s chief operating officer for Greater China.
“Proptech can mitigate potential market risks and maximise long-term asset value with respect to four key areas: human experience, health and safety, operational excellence, and digital drive.”
The power of proptech has been further reaffirmed during the Covid-19 outbreak, encouraging more real estate firms to increase their investment in proptech, he added.
One of the study’s more interesting findings is that the pandemic has particularly accelerated adoption of health and safety related proptech innovations.
“Proptech that addresses health and safety saw almost overnight adoption, speeding up China’s fight against Covid-19,” said Morgan. “In order to ensure safety, health and continuity in their workforce and buildings, landlords and operators responded to the coronavirus outbreak by actively leveraging technologies such as infrared thermographic scanning systems, AI vacuum cleaning robots, and automatic access controls, among others.”
These measures are likely to remain in place even after the pandemic is over.
Proptech companies believe that the current global uncertainty presents an opportunity for wider use of innovations and solutions they provide.
“More than ever the global property industry is now yearning for greater transparency and insight,” said Bob Courteau, global CEO of Altus Group, a Canadian commercial real estate services and software company. “Property professionals around the globe are trying to understand risks in unfamiliar situation and capture opportunities.”
Transparency will be a priority going forward as global asset managers become more aware of the need for assessing timely and reliable data to make decisions.
From voice-activated lifts to augmented reality, coronavirus spurs use of proptech by real estate sector
“Decisions can be informed, faster and made with greater confidence,” Courteau said. “This means better forecasting of future demand, tenant expectations and asset performance while eliminating dependency on high-risk hunches and assumptions based on lack of data.”
Justin Lau, CEO of Hong Kong-based Property Raptor, said clients are turning to their proptech solutions to mainly plug the revenue gap, while their customer relationship management system seeks to help property developers and agents increase sales in a more efficient way by using AI and blockchain technology.
He said that in China the company is working with multiple agencies with a network of more than 100,000 agents, noting that their “needs are very clear to us”.
More from South China Morning Post:
- Hong Kong home rents drop near universities, as mainland Chinese students stay at home for online classes
- Chinese purchases of US property slump amid Covid-19 pandemic, with rising political tension set to damp sentiment further