Our contributors reported resounding growth in the importance of a sense of place, community and sustainability
For so long, the narrative around technology has been that it forces people into lonely patterns of self-interest, looking at their phone rather than seeing what’s around them. But I believe that technology can help us all live better.
Freddie Fforde, Patch
Our roles as individuals within the concept of the multiverse - the idea that 'out there' there exists an almost infinite group of multiple universes – might seem almost infinitesimally small against the myriad of possible other worlds. There was a risk that perhaps this feeling could have been extended into the new and potentially overwhelming number of possibilities brought about by the development and adoption of new technology, but it seems that the reverse might be true. Our contributors reported resounding growth in the importance of a sense of place, community and sustainability – all of which impact the global demand for real estate.
Our contributors agree that Fforde, founder of the Patch startup, is not being idealistic. Individuals and businesses are far more focused on ‘purpose’ than they were five or ten years ago. Whilst there are other factors as to why this might be the case – the most obvious being the pandemic –digital technology is likely to be at the heart of the focus on ESG and sustainable business models.
Investors, too, are increasingly focused on a purpose that extends beyond pure profitability. The trend towards ESG has been arguably driven by the rise of social media, online reviews and ‘cancel culture’ putting pressure on firms to state and live by a set of values.
The ability to charge higher rent if you market an asset on ESG, at the same time as making a technological investment, has an impact on efficiency between growth and net as well as ESG. There are two big trends coming together here, and you’re being rewarded for both.
Rob Rayner, Saranac
Investors with purpose
One undeniable development is the broader sense of purpose that has emerged among businesses, founders and investors. While profit will always be important, it is no longer the North Star in all cases.
Patch founder Freddie Fforde says he was inspired to start his business by organisations that focus on social mobility. The company aims to be a positive presence in each local area, boosting the local economy and offering venues for community workshops and events.
Big data, huge opportunities
PropTech founders and their businesses are particularly excited about the potential for data to be used more effectively in the sector. Our contributors expected to see data driving innovative new ways of doing business. If smart buildings generate data on occupancy, could this be used to tailor rents? What services might spring up to attract people to spend more time in a particular site?
The build-to-rent sector is really embracing smart homes: each property comes with a smart device that could help you manage your portfolios and build a more meaningful relationship with tenants.”
Tahir Farooqui, Canopy
'Looking into the future, I do think buildings will be smart'
Mohammad Rashid Khan, Calipsa
The concept of the smart home is now mainstream. From doorbells to speakers to heating, lighting and kitchen appliances, there is an array of products on the market to meet consumers’ desire for more convenience at home.
The barriers to blockchain
'On the face of it, the use of Blockchain in real estate is an “out there” idea. But if you see Blockchain not as a store of value, but as a store of data - the possibilities for using it to streamline the conveyancing process are immediately apparent.'
Tom Hughes, Withers
Some PropTech insiders and canny investors are excited about the potential for blockchain to transform property investment – with digital assets not just being used as payment for transactions, but with blockchain being used to tokenise title and ownership of the underlying real estate itself so that it can be traded more efficiently.
Virtual real estate
Eyebrows were raised when a buyer paid $4.3 million for a piece of land in The Sandbox, a metaverse, in late 2021. Republic Realm, which invests in and develops virtual real estate, said the purchase was part of a venture with the games company Atari; but critics compare the meta-market to moon estates.
Efforts to tokenise and fractionalise real estate assets look more interesting to investors, but even the disruptors we interviewed for this report felt widespread adoption was some way off success. That said, the walls are gradually being brought down across the sector – with innovative businesses finding new ways to marry the roles and relationships between digital and physical assets.
Stratford in London could be another example… Covid will have accelerated these trends, but they were already happening.
Rob Rayner, Saranac
While city centres are undoubtedly going through a period of change, the experts we interviewed believe people will always want to visit them. In their view, we are seeing cities gradually break out of their retail and office silos to offer something more innovative and diversified. Focusing on specific sectors could help to drive value in certain areas, as seen in creative neighbourhoods such as Digbeth in Birmingham, UK, and the Media City projects in Shanghai and Dubai.
With governments setting ambitious carbon reduction targets, demanding high standards of energy efficiency from new buildings will not be enough. Green retrofitting, where existing real estate is upgraded to be more sustainable, is therefore a key for owners and investors in the sector.