October/November 2018

PropTech – implications for technology in the commercial property sector

//PropTech – implications for technology in the commercial property sector

A packed-out room at Rider Levett Bucknall welcomed pro-manchester’s latest PropTech event, focusing on how technology is impacting the property offering in Manchester.

Everywhere you look technology surrounds us. Whether this is in your car, at home or simply just your mobile phone, the world in 2018 relies on technology and being connected. PropTech is defined as part of a wider digital transformation in the property industry. It considers the technological and mental change of the real estate industry and it’s consumers and the change to our attitudes, movements and transactions with buildings and cities.

Across the world today, there are entrepreneurs creating new technologies to change the way
we use spaces, especially in commercial properties. At the beginning of September, pro-manchester gathered some of Manchester’s leading experts to discuss how technology is set to impact the property industry in the city.

Chaired by Joe Averill, who does transactions and asset management for OBI Property, the event welcomed: Jessica Bowles (Strategy Director, Bruntwood); Tim Ryan (Partner, DAC Beachcroft); Mark Lufkin (Chief Commercial Officer, Wondrwall) and Doug Ward (Founder, Telcom and Node).

Connectivity and the internet are as important as utilities for businesses now. With the rise of FinTech, EduTech and now PropTech, it is clear that technology is paving the way for drastic changes in sectors which have always followed a more traditional approach. Our panellists believe it cannot be argued enough that technology will be the single biggest change to happen to the property sector in generations.

Mark Lufkin, Chief Commercial Officer at Wondrwall, a technology disruptor aiming to make our homes smarter, previously worked on bringing technology to the automotive industry. “I started working in Germany and worked out how to bring technology into cars 30 years ago. When I started, it was completely normal that we wound the windows down and had no stereo in our cars. This just wouldn’t be acceptable if you were purchasing now.

“These days, cars take care of you. They are designed to keep you safe and secure and are about to start driving themselves. I look at a house on the other hand, and there’s nothing. When I moved into my home, there were simple changes that needed to be made; like USB ports to charge our phones. We’re not doing much in changing the way we build homes. I’ve been brought in to change this and apply what I’ve done to other industries, and I’m really excited about what we can achieve.”

Mark and Wondrwall are transforming our homes, but what are Manchester’s property tycoons’ thoughts on introducing technology to their spaces? Jessica Bowles, Bruntwood says: “I think technology is going to transform the relationship between the building owners and its occupants and this is going to be democratised. As a property owner and developer, we’ll be able to do a lot more things a lot more efficiently. What I’m interested in is how cities are growing and changing. Technology is changing all of our lives and that’s no different in the property sector. At Bruntwood, we’re thinking less about the 112 buildings we have, and more about who’s in our buildings and how they are using them.”

A fascinating insight into how Bruntwood now sees more potential in ensuring its tenants have great spaces, rather than expanding its portfolio. It is believed that by 2030, at least 30 percent of the average portfolio will comprise of flexible space. This is a huge shift and investors and property owners will need to adjust with this shift.

“Our core business has always been refurbishing. What we’re now seeing is people being prepared to pay more for a product that gives them an opportunity to interact with other businesses. This all tracks back to talent – the biggest commodity and challenge for the city is whether we have enough talent and how we keep that talent. Creating spaces that are interactive and attractive for people to work in is so important, as this is the environment they can thrive in. In a lot of our buildings we’re creating ground floor spaces where people can have breakout meetings and more interactions with other businesses. This co-working phenomenon has given us an easy in, easy out option. People are wanting much less formalised ‘single front door for a single business’ options, and that’s a hugely interesting change. We’re responding to this within our own portfolio because it’s important that we drive that change in our sector.”

Co-working spaces are already hugely popular in America, and now Manchester and London businesses are starting to respond in the same way. So how does Manchester fare against other cities across the world?

Surprisingly, with the city’s vast history in making landmark discoveries in technology, Manchester has the third worst connectivity in Europe. This is something Mayor Andy Burnham has highlighted he wants to change as part of his Digital Strategy. Doug Ward, founder of Telcom, launched a new product just last year, which future-proofs your building and creates a choice of internet providers. With their ‘Node’ product, your business can rest assured that you will never lose connectivity. Doug says: “The internet is crucial for growing our economy. Connectivity is the most important thing to businesses. When you look at the IoT, they all work purely on ubiquitous connectivity, which at present just doesn’t happen. I think the market is now starting to really loudly demand great connectivity.

With cranes crowding our city’s skyline, it’s clear to see that Manchester’s property sector is booming. Beetham Tower will soon be dwarfed by new build, so what does Manchester need to do in order to be ahead of the curve?

Doug says: “With a lot of places now headquartered here, Manchester is now a great place to be and has some great talent and some great opportunities. The Manchester property community is big enough to think globally, but small enough to co-operate and work across the city. The collaborative nature of our city is widely known and creates an environment which is a very exciting space for PropTech to develop.”

Of the high-rise buildings being built by developers across the city, from experience, Doug believes there are certain issues new tenants could face. “These taller buildings are going to have issues with connectivity. Your customers will expect to be able to make a phone call from their desk more than once a day, and developers will need to ensure they have solved this before even selling one foot of their new office space.”

When asked where they saw PropTech going, all of the panellists believed that artificial intelligence and the Internet of Things were going to pave the way for developments in the industry. In an era where data is becoming as valuable as oil, both AI and the IoT will deliver priceless data to industry leaders to learn from and adapt their spaces for occupants. As Manchester competes with London more and more, the next phase of growth will be hugely interesting. With a thriving PropTech scene, now is the time for Manchester’s economy to flourish, with excellent talent now choosing the North over the South. With an already successful technology industry in the city, responsibility will fall at the feet of the property sector to fully collaborate and learn.

Mel Hill
pro-manchester
www.pro-manchester.co.uk