{"id":24,"date":"2021-01-30T06:26:43","date_gmt":"2021-01-30T06:26:43","guid":{"rendered":"https:\/\/www.lancequek.vc\/home\/?p=24"},"modified":"2021-01-31T13:23:18","modified_gmt":"2021-01-31T05:23:18","slug":"mingtiandis-report-on-tech-adoption-in-asian-real-estate-2021-review-thoughts","status":"publish","type":"post","link":"https:\/\/www.lancequek.vc\/home\/mingtiandis-report-on-tech-adoption-in-asian-real-estate-2021-review-thoughts\/","title":{"rendered":"Mingtiandi’s Report on Tech Adoption in Asian Real Estate (2021) – Review & Thoughts"},"content":{"rendered":"\n

I have always been a proponent of an early singularity<\/em><\/strong> – the point where artificial intelligence will surpass the human brain. It is no surprise that I got really excited when a good friend, Nicholas from Merrowsmith Design Partnership, sent me this report. I have always been a big fan of technology and I would not be surprised that the investments made by the Vision Fund would pay off in the next 20 years.<\/p>\n\n\n\n

But anyways, back to the main report:<\/p>\n\n\n\n

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As Asia\u2019s real estate sector grows in size and sophistication, property developers, investors, and service providers in the region are increasingly finding ways to streamline their operations and gain an edge over their competitors by adopting new technological systems. Finally, the technological revolution has reached these old-timers. <\/p>\n\n\n\n

This trend towards system adoption in real estate is now popularly called proptech, and to better understand this path to innovation, particularly as the COVID-19 pandemic has created barriers to traditional practices. The survey uncovered a major shift towards the adoption of tech systems among real estate companies in the region, as well as a conviction among professionals in the industry that Asia is rapidly catching up to other regions in terms of tech adoption, thanks to shifting client expectations and technological evolution.<\/p>\n\n\n\n

Many property portals have sprung up in the recent decades, with names like iProperty, PropertyGuru, and 99.co making headline news with the venture funding rounds. Shown here are some of the proptech companies in Asia compiled by Fintech Singapore.<\/p>\n\n\n\n

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Technology adoption has accelerated due to COVID-19, which is a good thing. I believe that this will pave the way for the Internet-of-Things, which is now catalyzed by 5G, LoRaWAN, artificial intelligence (which brings me back to my thoughts on the singularity), edge\/quantum computing, augmented and virtual reality. We have already seen property portals like PropertyGuru adopting virtual tours, and I wouldn’t be surprised if they adopt an AR\/VR view by 2022.<\/p>\n\n\n\n

More than 50% of the respondents have stated that they have either increased the usage of existing technology systems or onboarded new ones.<\/p>\n\n\n\n

The virtual reality system enables potential homebuyers to view 3D videos and still images of properties and to take part in virtual tours using the audio on their personal mobile devices. During the second quarter of 2020, when mainland China had largely emerged from lockdown but many residents were still cautious about venturing outdoors, Beike users logged an average of 159,000 virtual property tours a day \u2014 up from an average of 11,000 a day during the same period of 2019, according to a company spokesperson.<\/p>\n\n\n\n

The surge in virtual reality adoption came after Beike, which received Series D+ funding led by Softbank Vision Fund 2 and mainland tech giant Tencent, had first begun researching virtual reality in 2015. The company, which was spun off from Beijing-based traditional brokerage Lianjia in 2018, had launched a dedicated virtual reality lab in 2016 and set up RealSee as its proptech unit in early 2020. Softbank had also invested another US$1 billion into Chinese apartment rental platform Ziroom, also a spinoff from Lianjia, through the US$100 billion Softbank Vision Fund. There also exists a Southeast Asian version of Ziroom, Flexstay Rentals, which is operational in Thailand, building SEA\u2019s leading AI-enabled end-to-end proptech platform for residential rentals, making residential rentals simple and transparent for tenants, landlords, and agents by digitizing and automating 90% of the processes. <\/p>\n\n\n\n

We also see the rise of multiple proptech corporate accelerators and VCs. JLL partners with Swire and Ping An to launch Urban Lab in China and also Lendlease to launch Propell Asia in Singapore. It also launched a $100 million venture fund (JLL Spark) – to invest in companies focused on leveraging technology to improve everything from real estate development and management to leasing and investing, while enhancing the experience of those who occupy it.<\/p>\n\n\n\n

Cloud and edge computing also seem like an interesting proposition for proptech, given that we are also going to see a surge in IoT devices. One of the largest growth areas for cloud usage in proptech is customer relationship management (CRM) – with the percentage of firms using it rising to 58% in 2020 compared to only 30% in 2017. Gartner found that spending on CRM software grew by 15.6 percent from 2017 to reach $48.2 billion in 2018. The number of respondents who are using an enterprise resource planning system (ERP) tripled from 8% in 2017 to 24% in 2020. Gartner\u2019s figures show that the enterprise application software market grew 12.5 percent from 2017 to reach $172.1 billion in revenues in 2018. Most respondents are also using some form of cloud storage (e.g. Dropbox, Google Drive, OneDrive) and sharing in their organization. Many are also using cloud productivity suites, and a significant minority started using cloud accounting and finance systems, CRM\/ERP systems, and interestingly, 38% using data analytics, dashboards, and data warehouses, which will be fundamental for us to reach the technological singularity.<\/p>\n\n\n\n

There is also increase in usage for logistics\/ecommerce, and this has also led to increase in terms of warehouse automation (smart warehouses), digital twins etc. which can be achieved with IoT.<\/p>\n\n\n\n

Now comes the interesting part: Adoption of Big Data, Artificial Intelligence and the Singularity Future.<\/p>\n\n\n\n

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From parking enforcements to property management, to fintech and investment platforms, we see an increasing interest in AI, which I strongly believe will continue to increase over the years as the real estate industry grows starts to gravitate with everyone else towards the technological singularity. However, regional and cultural differences will also play a role in determining the pace of big data and AI adoption. There is also the question of what\u2019s left standing when the buzz around these technologies subsides and consolidation begins, which is the same problem faced by venture investors around the world. In the meantime, the most practical solutions will come to the forefront and build the next generation of proptech unicorns. For example, AI, specifically federated machine learning, combined with LoRaWAN IoT can be used to determine the high and low points for air conditioning and lighting, by monitoring population density at different times. This will help property managers, developers and investors generate better returns and by extension, more efficient use of their capital.<\/p>\n\n\n\n

Some people are also looking at creating an operating system for buildings – reminds me of an ENGIE Innovation Challenge for Ng Teng Fong Hospital. We are seeing large tech companies like Microsoft, Google, Salesforce, and (of course, how can I forget) Softbank (through their Vision Funds) into the world of real estate. Right now, the technology for this is there, and the question is now on implementation. An example that I actually saw was uHoo – invested by PropertyGuru co-founder Steve Melhuish. uHoo is revolutionizing the monitoring and management of air quality to help our customers create healthier and safer homes and workplaces. Their technology is also able to assess virus survival rate in your home and office to determine your risk of contracting viruses (COVID-19 included) in a specific location.<\/p>\n\n\n\n

Investors accustomed to holding publicly traded securities are increasingly demanding more frequent and detailed reporting on their real estate investments. Those needs are putting pressure on developers and fund managers to find systems that can streamline the delivery of data. The growth of real estate investment trusts in the region has provided developers with enhanced opportunities to monetize their portfolios, but at the risks of the same real-time scrutiny that public stocks face. Illustrating the influence of public markets and their reporting demands on Asia\u2019s real estate asset owners.<\/p>\n\n\n\n

AI, Robotics, IoT – Seems like the Vision Fund’s vision is coming together, at least in the real estate sector within the next 30 to 40 years.<\/p>\n\n\n\n

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References:<\/strong><\/p>\n\n\n\n

  1. Mingtiandi, Yardi. 2021. TECH ADOPTION IN ASIAN REAL ESTATE, THE PANDEMIC DRIVES INNOVATION. A MINGTIANDI SPECIAL REPORT. <\/li>
  2. https:\/\/fintechnews.sg\/21668\/proptech\/proptech-companies-in-asia\/<\/li>
  3. https:\/\/static1.squarespace.com\/static\/56e039ed40261de4b2354f86\/t\/5a271da3652dea289420f126\/1512512950308\/An_Introduction_to_Proptech_in_China.pdf<\/li>
  4. https:\/\/www.techinasia.com\/softbank-beike-2b<\/li>
  5. https:\/\/visionfund.com\/portfolio<\/li>
  6. https:\/\/www.jll.com.sg\/en\/newsroom\/jll-spark-proptech-global-venture-fund<\/li><\/ol>\n\n\n\n

    Disclaimer: The author is vested in some of the companies listed in this article.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

    I have always been a proponent of an early singularity – the point where artificial intelligence will surpass the human brain. It is no surprise that I got really excited when a good friend, Nicholas from Merrowsmith Design Partnership, sent me this report. I have always been a big fan of technology and I would …<\/p>\n

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