Brexit, Technology & The Commercial Property Market
Since the vote to Brexit in June last year commercial property has taken a battering but despite the slowdown the sector is being revolutionised with the emergence and adoption of new technology.
Property outlook in 2017
Capital Economics reports commercial property investment across Europe fell last year for the first time since 2009, driven by a large decline in the UK. Investment in European commercial real estate fell by 10% in 2016 – the first annual decline since the global financial crisis.
Knight Frank reports transaction volumes decreased quoting the low oil price "continued to take its toll" on parts of the UK, with few property deals going through in 2016.
Those looking at commercial property from an investment perspective need to "stay calm and ride out any periods of volatility.”
Patrick Connolly, head of communications for Chase de Vere says there has been lots of background noise surrounding commercial property investments and valuations are lower.
Despite the bleak outlook on commercial property one sector which is seeing increased interest is property technology known as “PropTech”.
The property sector plays its cards close to its chest so spotting the next real estate trend ahead of time is important. As we witness a highly uncertain period the sector may face disruption.
This year we will see more PropTech start-ups revolutionise the property sector.
Scale up and do not give up
In a post Brexit environment what can we expect? With there being so much doom and gloom commentary out there as economists forecast the property market will “slow down” - it is worth thinking about the long term trends.
From the adoption of virtual reality visors, drones, storing information in the cloud to the sharing economy with the emergence of Air B&B - the property sector will progress further in an already fiercely competitive and fast moving sector.
Those looking to embrace PropTech in particular may consider updating to cloud computing infrastructure from architects to property developers, chartered surveyors, property managers, letting agents and property consultants - technology will play an important role in efficiency.
One example of a popular long-term trend is the use of cloud technology. As real estate companies begin to trust the cloud we have seen more and more firms migrate their services to the could. It is one way commercial property firms can reduce real estate transaction times and overheads.
The adoption of effective IT systems and implementing disaster recovery processes boosts mobility.
Boosting mobility with PropTech
What else do we see on the horizon? The emergence of driverless cars and the change in the number of people commuting and as more people work remotely and no longer go to an office this will impact property. Bearing in mind the change in lifestyle and work trends businesses going online, the need for city centres and office spaces will decrease.
Just think about this for a moment. The property sector (if PropTech continues to disrupt the commercial sector) could become an online service rather than a physical space.
Back to the basics
Going back to the basics in PropTech it is important to back up your data. If disaster were to hit do you have the correct back-up operations at hand? Is your customer data stored and kept in a safe place?
Data security is a huge concern in today’s tech reliant world. More and more businesses are using the cloud to store information therefore security is taken very seriously. The management of data is not very challenging once a reliable provider has been found.
Pilot projects and cutting through babble
We are in the midst of a transition with PropTech. There is so much technobabble out there that it is can be overwhelming to find what type of tech upgrade is suitable for those in the commercial property sector.
There is also the FOMO (fear of missing out) as a new PropTech trend arises should a company adopt or wait until the trend has been tried and tested? If you look at history there are numerous examples of technologies that were hyped by analysts to be the next big thing but then failed to live up to expectations.
There is no doubt we will continue to see more new and exciting PropTech start-ups emerge at an unprecedented rate.