Real Estate Investor Magazine South Africa August 2016 | Page 47

AN END OF THE COMMERCIAL PROPERTY
AGENT MODEL?

In a report by Deloitte titled “Commercial Real
Estate Industry Outlook - A nexus of technology
advancements and consumer behavior changes”, the
authors point out that a possible effect of technological
disruption is disruption on the current brokerage and
leasing model.
Technology can erode barriers between tenants
and property owners through cloud computing and
social media, providing cost-effective ways to obtain
property information and allow the digitisation of
transactions.

In particular, the Deloitte report forecasts several
scenarios including the rise of an Uber-like or Google
market victor – an entrant which completely disrupts
the commercial real-estate and industrial property
markets. However, it also paves the way for niche and
smaller companies by reducing entry barriers.

INFORMATION AGGREGATION, SHARING
AND COLLABORATION

Many industries have realised the appetite consumers
have for obtaining information and data to help them
make informed and intelligent decisions.
Trend forecasters indicate that the area with the
greatest likelihood for disruption involved data and
information, and data sharing and information
aggregation is the nervous-system of listings-based
industries such as real estate.

BRACING THE DIGITAL STORM

We are already seeing how digital disruption is
beginning to seep into commercial property and
www.reimag.co.za

industrial real estate markets around the globe. And,
because we are integrated into the networked and
global economy, it is only matter of months before the
disruption reaches South African shores.
Dr Paul Marsden, a psychologist specialising in
trends and technology believes there are many
strategic ways of dealing with technology disruption.
The ways in which companies dealing in commercial
real estate and private property are most likely
to respond are, firstly, by investing in disruptive
technologies or the acquisition of these companies.
Secondly, by launching products or solutions which
directly compete with disruptors or thirdly by exiting
from the market altogether by selling out while value
still exists.
While the full impact of the digital revolution on
the real estate industry has yet to be seen and felt, it
is an opportunity for South African companies and
entrepreneurs to innovate and disrupt on their own
grounds and through their own terms. Will we
innovate and disrupt through own efforts or do we
wait for the arrival of disruptors from international
markets?
In the end, we can’t tenaciously cling to old ways
and business models. It simply is not good business.
However, we can ask “what can we do better through
technology?” and then ensure that ideas are developed
and commercialised. In that we way, we have better
control of disruption.

RESOURCES
JDA
AUGUST 2016 SA Real Estate Investor

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