- Investors are looking for disruptive, cross-industry technologies
- AI innovations are hitting the market as AR/VR fails to hit critical mass
- Automation is driving the Space-as-a-Service model and unlocking investment in new PropTech
Both venture capital investors and traditional real estate organisations hold the purse strings, according to the report, with global investment in PropTech startups rising to $12.6 billion from $4.2 billion between 2016 and 2017.
Frank Cottle, CEO and chairman of Alliance Business Centers Network, said: “Proptech isn’t just another buzzword; it’s the critical path needed to transition previously stationary workers into the new mobility in the workplace, and, the data-driven decision making that will allow larger employers and government to migrate to full flexibility models.”
Advancing digitisation across other sectors and the amalgamation of these technologies is driving the PropTech industry, according to Minh Q. Tran, managing partner at European VC fund and accelerator PropTech Capital, who said: “We are seeing PropTech increasingly mix with the FinTech and InsureTech industries to enable cross-sector innovation.”
“For us, a solid investment opportunity works across user, business and technology trends. If it can provide the user transparency, simplify the cost structure of real estate and implements cutting-edge technologies, it has the potential to disrupt the market,” he added.
Examples of such disruptive technologies include blockchain and artificial intelligence (more on AI later). These have the potential to make “a significant impact on global real estate trading”, according to a recent report, restructuring the way information is analysed, used and exchanged in the flexible workspace industry.
Smart contracts are a compelling use case for blockchain and are used for the automated movement of funds, data and agreements. As such, they could be used for a range of applications including membership management and even keeping your coworking kitchen clean.
Such automation is driving a growing movement in the wider real estate industry to provide Space-as-a-Service, which requires landlords to view tenants more like customers.
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Such shifting attitudes will have a knock-on effect for PropTech as tenants demand smarter spaces, which are optimised to their needs. Roelof Opperman, principal at VC firm Fifth Wall, explained: “These offices are IP factories where we have to optimise the human factor. So, technologies like bio-measurements could play a significant role in this area, improving oxygen quality and taking other air purifying measurements to boost members’ brain power.”
“Wellness also has a big part to play in the retention of tenants. We’re already seeing fitness classes, nap pods and other such facilities proliferating coworking spaces. The next stage will be for on-site health facilities,” Opperman predicted.
Wellness is certainly a major concern for not just the coworking industry but for all office workers. A recent study revealed 64% of office workers have “poor” or “below average” mental wellbeing, and one-quarter of respondents feel their organisations do nothing to help their employees manage workplace stress.
Artificial Intelligence has yet to make much of an impact in the coworking sector. However, investment is rife with the UK announcing a £1 billion funding package for the AI sector and a recent PwC report predicting global GDP could be 14% higher in 2030 as a result of AI – the equivalent of an additional $15.7 trillion.
A recent entrant to the market could be a sign of how AI could be used in the industry. Abacus combines elements of AI and automation to allow tenants to bid and negotiate rental agreements with workspace operators.
The tool was developed in-house by Office Hub and is currently available across the Australia-Asia region. Abacus will be available globally by the end of 2020 when Office Hub will be operating in 100+ countries with more than 100,000 offices in its digital marketplace, Office Hub’s CEO Grant Philipp revealed in a recent interview. Later this year, the company also plans to go through a Series A Round venture capital funding to find investors for the first time.
On the other hand, investment in virtual and augmented reality startups fell 46% to just under $810 million last year compared to 2017, according to a recent report, citing the lack of commercial sales as the main reason for this decline. China has reportedly picked up the baton of investment for both technologies from North American investors.
The PropTech sector is certainly a dynamic space where investment is solid, but the exact technologies falling in and out of favour depend on the demands and needs of the end user.Share this article