After a slow start Australia’s proptech industry is taking off. The Proptech Association Australia (PAA) estimates more than 600 such companies have appeared over the past three years, several now market leaders and having established international offices.
Activity among scale-ups purchasing start-ups to capitalise on growth opportunities is also ramping up according to a survey into the country’s proptech landscape undertaken jointly by The Property Council Of Australia and Yardi software solutions. Since late 2019, the PAA identified 18 transactions in proptech, with just half of those estimated to represent about $274 million in investment.
Major capital raisings and mergers & acquisitions last year included the partnership established between national asset management firm Vicinity Centres with tech investor Taronga Ventures, a move that followed suit with global real estate firms CBRE, Dexus and Grosvenor Group. ASX-listed online tradie marketplace Hipages also purchased a 25% stake in property management platform Bricks + Agent, a provider of property maintenance and workflow software for the commercial real estate sector as well as residential and strata. Established in 2016, Bricks + Agent is now the market leader, with users including Ray White, Raine & Horne, McGrath and LJ Hooker. The company also has offices in Sri Lanka and London,
Bricks + Mortar has just signed off on its latest deal – a three-year agreement with global real estate giant JLL to provide services for its portfolio of commercial assets across office and retail as well as residential.
JLL’s head of Asset and Digital Development James Peterson said that collaboration with Bricks + Agent expanded and personalised the firm’s existing platform. “We can now offer tenants in JLL managed properties all the services and pricing it has in place for managing the base building,” he said.
B+A’s automated platform significantly reduces the work of a tenant facility manager by lowering the number of “touch points” required in the average maintenance request – a number the company calculates at more than 5400 per residential portfolio of 100 properties. It reduces complexity by allowing tenants to access such services as cleaning, plumbing, security, electrical and miscellaneous handyman-style work in real-time. Jobs can be booked when most convenient while other functionalities include sending notifications of a worker’s arrival time, photographs of completed work, allowing feedback and secure payment. Works can be arranged as one-off or regularl occurrences.
Digital leasing in the lead
JLL has also been driving digital leasing solutions for the commercial real estate industry with the aim of slashing deal times and improving client engagement.
Shortcomings of manual processes were further exposed by the pandemic according to JLL analysis, simply because of the sudden increase in using technology to manage daily operations such as virtual property tours and tenant communication.
Director of Product Management with JLL Technologies’ global leasing group, Patrick Leiser, described the impact of covid to the CRE industry as “blindsiding”, to the point it had “forced commercial real estate professionals to adopt a digital transformation roadmap in response to the new business climate caused by the pandemic”.
“Commercial real estate companies increasingly regard the digitisation of operations as a strategic imperative,” he said.
JLL’s digital lease management tool Azara has been designed to shorten time spent managing listings and leasing via an AI-enabled solution. The powerful tool gathers and centralises leasing data across locations worldwide which gives firms a one-stop ability to manage contracts and transactions from start to finish.
Reshaping the future
Despite the great strides forward by Australia’s proptech developers and its uptake by CRE, there is still a way to go. Half the major real estate companies that participated in The Australian Property Council/Yardi survey reported still using spreadsheets to assess the performance of their portfolios. This mirrored the previous year’s findings, when regular survey contributor Charter Hall’s chief information technology and technology officer Sheridan Ware commented that Excel was “still the go-to tool for many property tasks because it’s the tool many of us grew up with and feel most comfortable using.” Ms Ware went on to add that “as we start to achieve the efficiency gains, insights and risk reduction that are possible when Excel is replaced by more systematic approaches, the tide will start to turn and digital approaches will dominate.”
In a signal of the turning tide, Ms Ware’s comments in this year’s survey were that “companies looking to scale, provide industry-leading customer service and attract and retain top talent will struggle to do so on spreadsheets”. Still, a quarter of survey respondents (comprising 172 top real estate professionals) said their biggest barrier to technology adoption was changing existing behaviour.
This is not halting the growth of commercial prop tech in Australia however with well over half the proptech solutions developed in the past four years being specific to the CRE industry, PAA data shows. More than 80% of there cater to the B2B market, about 24% on managing property.
- The Australian Proptech Summit 2022 is taking place this week in Sydney. See Prop Tech Summit |