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Friday 18 September 2015

Mobile devices are changing the property industry - Real Estate Committee newsletter article, July 2015

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Mobile devices are changing the property industry

Samuli Koskela, Lexia Attorneys, Helsinki

samuli.koskela@lexia.fi

 

Over the past 20 years, information technology has fundamentally changed the way business is done. In the last decade, we have also seen countless so-called 'disruptive' innovations emerge, bringing with them tremendous change. The first iPad was released on 3 April 2010, just five years ago. It has transformed the IT business, but it has also changed, and continues to change, the property business.Another disruptive example is Uber, the transportation network that is revolutionising the taxi industry, with an estimated value of almost the equivalent of Hertz and Avis combined.

What does this all mean for the property business? Simple: smart new solutions that address the pain points of the industry and ask the age-old question, 'is there a better way?' might be able to provide a solution that will make business easier and more efficient, and in the process, inject real change into the real estate cycle.

Thus far, the industry has mainly relied on desktop applications for everything from customer and portfolio management to financials. One of the challenges with this model is people eventually end up with too many desktop solutions. In addition, asset allocation, risk management and transaction supervision, and the vast amount of information to digest create pressure for daily tasks.

Today's real estate companies and service providers must adopt new approaches to address a constantly changing market environment, regulatory requirements and financial risks – while meeting the challenges of expanding globally and achieving sustainable growth.Those who embrace this technological change will gain a competitive advantage, as has been proved across multiple industries, and the property sector is no exception. Those who do not will lose out in terms of efficiency, customer acquisition and retention, and revenue.

To return to the initial question, 'is there a better way for the property industry?' what is there to gain when the challenge is continuous work evaluation and the implementation of strategies in multibillion dollar property portfolios in a global business climate where operations cross both geographical, organisational and language boarders? Thus far, we have seen new integrated solutions for property asset managers that make due diligence, market analysis, portfolio management and lease negotiations easier. There are mobile location analytics packages with tailored site evaluations and sophisticated market analysis, map-based formats with integrated demographics, competing franchises, disposable incomes, renting/ownership profiles and extensive property and market data with real estate leasing portfolios in real time. In addition, the next wave of technology, known as the Internet of Things, is set to change the commercial real estate industry.

While owning and maintaining an asset, one needs to steer the operations based on data. The winning solutions of the future deal with the information overload almost all businesses face today. Where good data provides accuracy and efficiency to make better decisions, there are quantities of (bad) data that are stored without a clear purpose.

Thus, in the not-too-distant future, asset managers and service providers should be able to: tag any real estate within the portfolio with risk and reward in less than ten seconds; take into consideration all risks involved and manage the asset throughout the lifecycle; and assess and compare risks across multiple jurisdictions.

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