Analyzing Real Estate Technology Market

After the industrial revolution, countries were motivated to build large number of buildings to house the migrating resident, evolving industries and offices. Also in the race to dominate and hold position as global leadership, many cities were tasked to design large residential townships in outskirts and a central downtown, which personified the foothold they had in the economic growth. This led to building of huge infrastructure in residential, industrial and office space. Many cities built downtowns with imposing Skyscrapers from 60-100 floors and accommodating several 1000s offices within a single building. Many large corporations built or leased out entire such buildings and used them to showcase their brand image. Such magnanimous infrastructural to build cities developments have led to the emergence and evolution of computerized automation in building management for residential, commercial and industrial space.

Many technology solutions have emerged over time in this space. The following analyzes the technology market and trends.

Industry and Value Chain

The Real Estate industry users can be broadly classified in to the following industry value chain:

1. Residential - Single-family & Multifamily residential, Apartments, Row-houses, Villas

2. Commercial – Offices, Education-schools-universities, Hospitals-healthcare

3. Retail - Malls, Shopping centres, Entertainment plazas, Movie theatres

4. Hospitality – Hotels, Leisure-style resorts, Hospitality properties

5. Industrial – Manufacturing & production, Warehouses, Distribution, Logistics properties

6. Alternative Real Estate – Student housing, Storage houses, Premium retail (automobiles)

7. Communities, Building Owners Association Management – Residential & Commercial

Real Estate Market Place

The properties business has a tertiary market place for property sales, leasing and consulting that includes:

1. Property Sales and Lease Brokerages: These are brokerages involved in providing services for leasing, selling, buying, home improvement and property management. In matured markets is dominated by agencies like Re/Max, RoyalLePage, Century21 etc.

2. Property Management and Consulting: These commercial agencies such as Colliers, Jones Lang La Salle (JLL), Cushman & Wakefield, Knight & Frank, CBRE whose primary focus is for large scale leasing, property and facility management, capital markets investment, project and development services, consulting and research to help real estate community

3. Shared Office Space: Companies like Regus, ServCorp, Signature, Kora that provide a network of offices for home based business to multi-national corporations. They take the entire or a majority of the building on lease-hold bases and sub-let it on fractional lease bases for office and commercial use

4. REITs – Real Estate Investment Trusts (pronounced as “REETZ”): These are organizations that build, manage and operate buildings for cash flow such as Brookfield REIT, Rio-Tinto REIT, Emirates REIT

Real Estate Software Market

With the introduction of IBM-client server computing and software programming, several niche real estate software solutions found their way between 1980’s – 2000. Further post 2000 dot.com evolution led to emergence of portal based solutions for cloud computing and transaction processing. Further with the launch of smart phone devices in 2007 and emergence of mobile-device (phone, tablet) computing, many vendors envisaged on moving simple-medium complexity transactions using a mobile interface. Most of these cater to the requirements in bits-and-pieces.

These can be broadly grouped into strategic categories:

1. Client-Server implementation

2. SaaS (Software-as-a-Service) OR Subscription

3. Mobile-Web Solutions

The industry software solutions evolved in a fragmented fashion and can further be classified as under following depending upon their features and nature of application:

1. ERP (Enterprise Resource Planning) & Accounting Software: Like any other business organization, most property business required to maintain their day-to-day books of accounts and record transactions. It also assists with preparing year-end financial statements. However as a process most of this is done after-the-fact once the vendor generates the invoice or the sales team closes sales deal. It does not or very sparsely allows direct interaction with the end-user and consumer.

1. CRM (Customer Relationship Management): The introduction of cloud based computing that allowed user to login to online portal and complete a transaction took its space in the real estate industry as well. One of the most adopted solutions on this platform is CRM solution. These are solutions that allow users to maintain enquiry-to-order process and customer profiles through their web based portal solutions. A plethora had these had been designed during the Dot.com boom and very quickly died away in the bust. The survivors have struggled to maintain profitability within the ecosystem and have led to decline in further development.

2. Property Management: These are solutions that actually allow user to track sales, generate contracts, assign units to owner’s profiles, track services, manage vendors and inventory and maintain transaction records. Most of these solutions were built in the late 1990s to early 2000 when the technology was still monolithic with client-server architecture that requires heavy capital spend on technology infrastructure. This would include long lead times for procurement of hardware such as servers, racks, network switches, connection panels. Additional cost and time for installation. Further implementation costs and time from 6 months to 2 years to configure the system to be used a per the company’s requirement. Most of these systems were built for desk users and do not enable mobile computing.

3. Facility Management: The real estate facility management solutions are designed to manage space and assignment of facilities in an optimal manner. Such solutions help organize the location and space dynamics for offices, commercial and industrial buildings. Some of these also include features to schedule meetings, log-in visitors, security & safety, computerized maintenance management software (CMMC), computerized asset and facility management (CAFM).

4. BMS (Building Management Systems): These are systems built to manage building’s electrical and mechanical equipment such as ventilation, lighting, power systems, fire systems, security systems and other for managing building performance efficiently.

5. Property listing portals (aggregators): These were the first set of fully online-portal based solution. They are essentially digital yellow pages glorified with audio-visual enhancements with property images, floor plans, maps and other specifications information. They do not enable direct interaction with the seller or builder. They lack any transaction processing or service processing features. They are also limited in their revenue generation model as listing and lead generation services.

​This opens up an opportunity to create something unique that is comprehensive and cohesive to the address the challenges posed by increasing population and complex resource management, opportunities of urbanization and digitalization and benefits of emerging economies striving to try new unique solutions to innovate and simplify.