THE RISE & FALL OF PROPTECH IN REAL-ESTATE
Globally, developers assign 1-3% of project cost for technology. What about Indian real estate companies? Some of the key players of Indian real estate present their views on Prop-tech.
The RERA and GST implementation has increased the due diligence and internal processes for the developers to adhere to compliances. This has also led to recognizing the need for technology assistance to make systems efficient - a fact that was ignored or not given due importance earlier, by most of the developers of the country. As Nirupa Shankar, Executive Director Brigade Enterprises Ltd, Bengaluru rightly pointed out that people will invest in technology only if they feel it will help them make more money. “Prop-tech for.me is anything that can help construct faster and/or increase revenues. It all comes down to the fact of using the right technology to increase efficiency.” Emphasizing the same point Darshan Govindaraju, Director - Vaishnavi Group, Bengaluru said, “Any developer or real estate professional would first look at the revenue and profit margins before employing a technology but they also want to deliver a quality product so that clients will choose their product over other in a highly competitive market.” Akshay Dewani, CEO- Residential & Partner of Assetz Property Group, Bengaluru opinion was that there is an enormous scope for prop-tech companies in real estate that largely works in an antiquated fashion. “We have already seen an exponential increase in the use of drones, VR and AR technology and their utilization will increase going forward to garner better sales in the current market which has more supply than demand.”
Another significant observation is the domination of online brokerage platforms in the prop-tech space in India. Amit Wadhwani, Managing DirectorSai Estate Consultants, Mumbai expressing skepticism on the survival of print medium in the digital age stated, “Developer’s marketing teams are tech savvy and increasingly using social media and digital technologies to reach out to the consumers.” Aji Issac Mathew, Founder & Managing Director -Techshu.com from Kolkata gave an example, “Advertising in print medium establishes a trust factor with the consumer and informs them that the property has arrived. Then the follow up digital campaign builds on that to create branding and consistent awareness and engagement, they go together at a ratio of 30-70.”
Rohit Ruparel, Vice President, Sales & Operations, Sai Estate Consultants contends that it’s not about the whether the industry is ready for technology or not. It’s all about the consumer and the consumer has become tech and digital savvy.
While, there is a little doubt that prop-tech has disrupted the way business is done in real estate, there is also a concern that many prop-tech companies though with a brilliant solution failed to succeed. What’s more, many a times technology companies fail to apprehend the specific needs of the sector and tweak their product accordingly. This is why so many technology companies fail to make a dent in the realty sector, though Avinash Gautam feels it’s still early days for prop-tech in India.
Aksahy Dewani on the other hand is of the view that technology disruption had happened in Indian real estate quite some time back and now we will see the survival of the fittest. Nirupa Shankar agreed that that the reason for tech start-ups shutting down is that they spend too much on marketing themselves rather than developing back-end technology. Matthew felt the reason for their closure was the multi-player industry. “Those in the niche industry will always survive over a period of time.” According to Avinash K. Gautam, CEO -Silvan Innovation Labs Pvt. Ltd, from Bengaluru, most developers defiantly have plans around automation but since it’s a new thing everyone is experimenting at their own pace. “Real estate is taking a measured approach towards it. All said and done real estate projects are very complex projects and one can’t expect change over-night.”
The prop-tech companies are propagating virtual and augmented Reality for sales, energy consumption monitoring for sustainability and other smart solutions for parking, waste management and transportation. The future also entails block chain and digital currency. As Gautam puts it, “Today’s tech savvy teenager is tomorrow’s home buyer or investor. Real estate players have realized this and are now willing to spend 20-25 rupees extra per sqft for automation in projects.” Mathew too feels that India very soon will go the American way. “We are standing at 17.5% in terms of digital spent. Last year in USA the digital spent was more that the TV spent, in India that will happen very soon.”
With 77 deals worth $928 million being reported in the proptech space since 2013, India is a hotbed for investments.