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.

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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.

The Chal­lenges

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 Po­ten­tial

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.

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