Proptech & The Dis­rup­tion of Real Es­tate

Silicon Luxembourg - - IN FOCUS -

THE WAVE OF DIS­RUP­TIVE SOLUTIONS US­ING IN­NO­VA­TIVE TECH­NOLO­GIES IN SEC­TORS SUCH AS FI­NANCE (FIN­TECH AND REGTECH) RE­CENTLY EN­TERED AN OTHER ONE: REAL ES­TATE. THROUGH THE TRANS­FOR­MA­TION OF THIS SEC­TOR IN AN IN­CREAS­INGLY DIGITALIZED WORLD, A NEW CON­CEPT WAS BORN, BRING­ING WITH IT BIL­LION-DOL­LAR OP­POR­TU­NI­TIES: PROPTECH. LET'S TRY TO BET­TER GRASP THIS SWEEP­ING MAR­KET EVO­LU­TION. RE­FRESH­ING AN OLD-FASH­IONED IN­DUS­TRY

Proptech is a term used for star­tups that pro­vide in­no­va­tive tech­no­log­i­cal solutions for the real es­tate mar­ket. By im­prov­ing cur­rent eco­nomic mod­els or in­te­grat­ing dis­rup­tive solutions, Proptech play­ers rein­vent dated meth­ods still used in the real es­tate in­dus­try. Dig­i­tal con­text and evolv­ing life­style are also key to iden­ti­fy­ing ar­eas for growth.

SOLUTIONS FOR A NEW PAR­A­DIGM: NOMADISM AND THE SHAR­ING ECON­OMY

The first star­tups that emerged from Proptech were in­spired by the dig­i­tal no­mads of younger gen­er­a­tions and driven by the evo­lu­tion of the shar­ing econ­omy. This new style of con­sump­tion is re­flected across so­ci­ety: new co-working and busi­ness cen­ters are pop­ping up ev­ery­where; communal apart­ments are no longer ex­clu­sive to stu­dents but to all de­mo­graph­ics (for ex­am­ple, fam­i­lies and the el­derly); and house swaps are more and more com­mon.

These ex­ist­ing ac­tiv­i­ties are ex­pand­ing their mar­kets thanks to dig­i­tal solutions, such as hous­ing man­age­ment soft­ware, cloud-based doc­u­ment man­age­ment and the de­vel­op­ment of on­line com­mu­nity plat­forms that build trust through rat­ing sys­tems.

THE QUEST FOR OP­TI­MIZA­TION AND BET­TER PRO­DUC­TIV­ITY

Var­i­ous tech­nolo­gies have ar­rived to dis­rupt the whole value chain in the real es­tate sec­tor. Some of them are al­ready tried-and-tested, in­clud­ing crowd­fund­ing, build­ing in­for­ma­tion model­ing, blockchain, drones, pre­dic­tive anal­y­sis, In­ter­net of Things and 3D print­ing. Star­tups are cur­rently merg­ing those tech­nolo­gies to forge busi­ness mod­els that are likely to gen­er­ate op­ti­miza­tion and pro­duc­tiv­ity.

No part of the real es­tate value chain is left un­touched. This rev­o­lu­tion can be split into five main seg­ments: fi­nanc­ing, con­struc­tion, trans­ac­tion, man­age­ment and oc­cu­pancy.

These dis­rup­tive trends and trans­for­ma­tive eco­nomic mod­els will have im­pacts be­yond the Proptech sphere. Costs will be cut across the board: in­vestor cap­i­tal, con­struc­tion work, in­ter­me­di­a­tion and build­ing man­age­ment. This lighter fi­nan­cial load will fi­nally open the door to qual­ity im­prove­ments within the sec­tor.

Im­proved pro­duc­tiv­ity will de­crease costs and im­prove qual­ity, ben­e­fit­ing cus­tomers, in­vestors and em­ploy­ees with chal­leng­ing working con­di­tions.

To­day, the gap be­tween sup­ply and de­mand sways stake­hold­ers to tol­er­ate a qual­ity of ser­vice that would be un­ac­cept­able else­where, namely in the in­dus­trial sec­tor, which has long ad­hered to the zero fault con­cept.

PROPTECH: THE FU­TURE OF LUX­EM­BOURG?

Real es­tate ac­tiv­ity used to be in­trin­si­cally linked to va­can­cies and the avail­abil­ity of prop­erty on the mar­ket. Small coun­tries are there­fore “pe­nal­ized” due to a lower num­ber of trans­ac­tions com­pared to big­ger coun­tries.

Lux­em­bourg, how­ever, has the po­ten­tial to be­come the tried-and-tested mar­ket for in­no­va­tive real es­tate solutions that could be glob­ally ex­panded. In terms of as­sets and qual­ity, Proptech star­tups in Lux­em­bourg can com­pete with other mar­ket play­ers. To foster the emer­gence of lo­cal Proptech star­tups with the po­ten­tial to be­come uni­corns, the de­vel­op­ment of Proptech in­cu­ba­tors, in­vest­ment funds and part­ner­ships with lo­cal real-es­tate play­ers are es­sen­tial.

AU­DREY BAVEREL IN­DE­PEN­DENT DI­REC­TOR / STARTUP AD­VI­SOR

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