REIT ASIAPAC
continue to rely on ‘ gut feel ’ to make decisions . As one business leader told me recently : “ I didn ’ t need data 20 years ago to make decisions , and I don ’ t need it today .”
Mind the digital gap
This ‘ digital divide ’ is very clear in the results of our survey . For instance , nearly a third ( 32 %) of survey respondents expect big data analytics to have the biggest impact on Asia ’ s real estate sector over the next five years .
Conversely , 33 % of property companies are still using spreadsheets for accounting , benchmarking and performance analysis , 26 % for budgeting , 28 % for valuations , and a massive 46 % to manage their portfolio financing .
Consider the implications when , in the words of MSCI ’ s Head of Real Estate Client Coverage Asia Pacific Varun Malik , “ deals are now being rooted in data .” Of course , there are some companies that are investing in technology and data at speed . But there is also a propensity for property players to throw around the ‘ big data ’ buzzword , when they should be focused on getting their simple back-office functions in order .
Why , when our research clearly shows a growing gap between the leaders and laggards , are some companies choosing not to invest ? on real estate . But before we get to the big data , we need to start with the small data . That means fixing the data we already own . Bringing all building data into a single platform provides a portfolio-wide view , leading to deeper insights and more opportunities to innovate .
2 . Embrace an experimental mindset : Take a leaf out of Silicon Valley ’ s “ move fast and break things ” book . An experimental , curious mindset gives us permission to try , test and make the occasional mistake . Think progress , not perfection . As you build a business case for each technology , you will uncover indicators of where value really lies .
3 . Prioritise people : Forget the race to acquire the latest , greatest new technology . We invented technology to serve people , so always keep the end-user experience in mind . This makes communicating the long-term benefits of technology and data mission critical .
According to McKinsey , less than one per cent of revenue was invested in construction innovation in the years before the pandemic , while the aerospace and automotive sectors spent between 3.5 % and 4.5 % of their revenues on R & D .
A lot of companies are now playing catch-up with technology , as 60 % of our survey respondents expect to invest in business process automation over the next five years , and 58 % are financing big data analytics . These companies are now operating from a simple principle :
The simple truth is that change is hard work . Resistance to change remains the biggest barrier to proptech adoption across the region , outstripping cost , resources , time or confidence .
But the world has changed and real estate is changing too .
Almost two-thirds ( 62 %) of respondents to our survey noted a “ significant ” or “ major ” impact on plans for their workplaces following the pandemic , and 58 % observed the same level of impact on their portfolios .
The overriding lesson from the Covid-19 crisis is that the world is now consistently inconsistent . Things can , and do , change overnight . Preparing for ongoing unpredictability requires new systems and processes .
So where do you start ? Here are three ideas :
1 . Think big but start small : Big data will have a huge impact
The best time to invest in technology may have been yesterday , but the next best time is today .
ABOUT THE AUTHOR
With 30 + years ’ experience dedicated to real estate and technology , Bernie Devine is a leader in digital transformation in real estate and using data to create a more competitive and collaborative environment .
His expertise includes asset and investment management , private equity , operations improvement , program and project management , finance , technology implementation and compliance .
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