CONNECTED SPACES Adapting properties to remain competitive - FUTURE OF REAL ESTATE - Property Funds World
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PropTech
IN FOCUS 2021
CONNECTED SPACES FUTURE OF REAL ESTATE USE OF DATA
Adapting properties to remain Technology plays a starring role Transforming the real estate
competitive value chain
Featuring Essensys | Yardi
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CONTENTS
04
INSIDE THIS ISSUE…
04 TECHNOLOGY STARS IN THE FUTURE OF REAL
ESTATE INVESTMENT
By A. Paris
06 DATA DRIVEN COMPANIES WILL DELIVER SERVICE
FOCUSED REAL ESTATE
Interview with Richard Gerritsen, Yardi
08 CREATING FLEXIBLE, CONNECTED SPACES
06
Interview with James Shannon, Essensys
11 DIRECTORY
08
Published by: Property Funds World, 8 St James’s Square, London SW1Y 4JU, UK
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PROPTECH IN FOCUS | Jul 2021 www.propertyfundsworld.com | 3
OV E RV I E W
Technology stars in the future
of real estate investment
By A. Paris
W
hen Covid-19 first plunged the world into a series provided by each property,” writes Dimitri Tournas, an asso-
of successive lockdowns in the early part of last ciate in the real estate team at Withers, the international
year, to many, the prospects for the global prop- law firm.
erty industry appeared bleak. Landlords, investors and tenants have all been forced to
With hundreds of millions of workers around the world adjust and are eager to maximise the potential of proper-
being encouraged to work from home indefinitely, many ties which are more in demand, given the current climate.
felt the long-term impact on both the commercial office Against this background, new technology is helping more
space market and city centre retail would be potentially organisations use real estate more flexibly, enabling a hybrid
devastating. model where staff alternate between working from home
Starved of traditional commuters and devoid of office and spending time in the office. It is proptech which is prov-
workers, what would happen to many of the densely-built ing critical to support this trend.
central urban office districts where so many people have Daniel Lepore, AMP Capital Real Estate’s Head of
traditionally worked? Asset Technology, comments: “There’s no doubt proptech
Now, as economies begin to recover and workers return has become a key change for the way we operate our
to the office – but in new and more flexible ways – there buildings. It is increasingly becoming a differentiator for
is a growing realisation: New technology is set to reshape building owners to deliver superior tenant experiences,
the way the industry operates and ‘proptech’ is taking on efficient operations and deliver data-driven insights to
a crucial role as the real estate industry emerges from the better inform investment decisions and ultimately deliver
pandemic. Things may never be quite the same again. greater returns.”
“The key to maximising existing and current real estate The growing recognition that proptech is crucial to the
projects is increased flexibility as to the use and services industry’s future is encouraging a flood of investment to
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OV E RV I E W
the sector to ensure work spaces deliver the necessary and the need for innovation has never been greater,”
benefits to investors, landlords and tenants. said Kristopher Wojtecki, Managing Director, Real Estate
“As buildings become increasingly digitised, it’s imper- Investments, PSP Investments, when announcing the
ative to invest in solid smart building foundations such as investment.
cybersecurity and data protection to ensure we can enact Other proptech funds saw similar pledges. In November
on current and future trends,” Lepore continues. 2020, Round Hill Ventures (RHV), announced the first EUR200
million close of a dedicated European PropTech Fund. The
Proptech is changing the way the industry operates firm said the fund attracted strong demand from large institu-
– for everyone tional capital, providing access to the fast-growing proptech
Real estate investment managers use proptech to improve sector for sovereign wealth and pension funds.
the physical performance of assets, or the processes Michael Bickford, Founder and Chief Executive Officer
involved in managing those assets. For instance, software of Round Hill Capital, comments: “We are on the cusp of
solutions can help create new efficiencies by digitising major changes in global real estate as the sector evolves
manual, cumbersome workflows and reducing the number to match modern consumer expectations and streamline
of systems needed to store data. its operations...We see a clear market opportunity for tech-
That in turn typically results in savings of time and nology centred around the modern needs of residents, and
money while making it easier to scale a business, claims I’m excited that our fund will help address this opportunity
Bernie Bazile, vice president in Callan’s Real Assets for investors and society alike.”
Consulting group, writing in a recent newsletter.
“The corporate real estate industry is rapidly implement- Environmental concerns
ing technology that enables new needs at scale: sensors, Proptech is also attracting attention from investors
automation, touchless access control, employee experi- for another reason. It is increasingly aligned with the
ence apps,” details an article by JLL Technologies. Environmental and Social Governance (ESG) objectives of
Zsolt Kohalmi, Global Head of Real Estate & Co-CEO asset managers.
at Pictet Alternative Advisors, remarks: “Clearly, digitisa- New technology and better use of reliable real-time data
tion and data uses have multi-dimensional repercussions on the performance of buildings is becoming increasingly
across our sector. They have a huge potential to enhance important as both investors and tenants demand more sus-
all facets of the investment manager workflow from sourc- tainable, greener workspaces.
ing to exit and everything in-between. One of the interesting Sophie Taysom, director at Keyah Consulting, a UK advi-
facets is digitalising building operations, which will eventu- sory firm, says: “These requirements, once developed, will
ally lead to better investment performance for investment largely shape investment, loan, and indeed even insurance,
managers.” decisions. We will also see a further increase in pressures
Lepore outlines the impact of data-driven strategies from buyers and tenants, for homes, buildings and public
on the competitive landscape for real estate investment spaces that have a positive social impact.”
managers: “These technologies are enabling portfolio vis- Pictet’s Kohalmi stresses the importance of capturing,
ibility of building performance making it easier than ever measuring and rationalising operational performance using
before to capitalise on useful applications such as fault data, which he says barely exists for almost all of the esti-
detection diagnostics, performance degradation modelling mated 85pc of the EU building stock which is more than
and even AI based autonomous Heating, Ventilation and 20 years old.
Air Conditioning (HVAC) controls. “This is especially important given the imminent, yet
unquantifiable risk of future carbon tax / energy offsets,
Institutional money floods in which will directly affect real estate operational and invest-
The growth potential and crucial role proptech has to play ment performance,” Kohalmi adds.
in the future success of real estate investment is also being “I am a firm believer that technology solutions are an
acknowledged by institutional investors with a string of new important part of our ESG strategy to reduce environmental
funds being created to funnel cash into the sector. impacts while also having a positive impact on our ten-
In March 2021, Greensoil Proptech Ventures launched ants, visitors and the wider community,” remarks Lepore.
the Greensoil PropTech Ventures fund II. The fund’s first “The ability to be able to track metrics such as energy
USD100 million closing was backed by Canada’s Public performance and combine them with AI means we are
Sector Pension Investment Board, one of the country’s larg- able to impact the indoor environment which in turn will
est pension funds. improve customer comfort, lower energy use and reduce
“The initial closing of Greensoil PropTech Ventures Fund our environmental footprint, and all in real time. Lowering
II comes at a time of significant opportunity and adver- our environmental impact is a big focus for AMP Capital’s
sity for the real estate industry and the global economy Real Estate team.” n
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YA R D I
Data driven companies
will deliver service
focused real estate
Interview with Richard Gerritsen
T
here’s no doubt that technology has the power to approach and is investing heavily in this area. “We strongly
transform the entire real estate value chain. Investors, believe having managers, external suppliers and tenants
asset managers, landlords, tenants and residents all all working on the same platform will lead to a completely
need to be ready for this shift. The change will result in different experience of real estate,” Gerritsen says.
a closer relationship between investors and the end-users, Operationally, the difference will be fundamental.
eventually creating a better experience for everyone. On Gerritsen elaborates: “While currently, property managers,
one level, it’s no surprise that the real estate industry is asset managers and investors each work in their own sys-
embracing new technology. After all, ordinary consumers tems, a single platform approach means that operations
now expect far greater levels of convenience as services will become much more fluid. Data will be accessed and
like home delivery have mushroomed, allowing them to utilised in a seamless way, but this is something that will
order virtually anything with a few taps of their smartphone. happen over time.”
Real estate transactions, which are of much higher mon- It’s a transformation that will take place throughout the
etary value, should naturally offer end-users the same level real estate industry and it is also resulting in buildings
of comfort, ease of use and accessibility. being viewed as a brand rather than just a physical space
Richard Gerritsen, Regional Director Europe for Yardi, that’s simply leased. This is vitally important as compa-
says: “Technology has a tendency to cut out the mid- nies choose their workplaces based on service and the
dleman and therefore the whole value chain will start to environment in which they want their employees to work.
develop into something new. Operating models will be Providing space as a service should be a fundamental part
different, driven by automation. This means business and of a real estate strategy moving forward and deploying the
revenue models will also change.” right technology can help facilitate state of the art services
As a firm, Yardi is a strong advocate for a single solution that will successfully attract tenants.
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YA R D I
“Investors have begun managing their investors have with the market, their clients and
property’s brand. By using some of the bigger their business overall,” Gerritsen says.
operating platforms and providing services that Having access to information about
residents and tenants desire, the gap between potential clients can give landlords a better
the investor and the actual “user” of the prop- understanding of how to future-proof their
erty becomes much smaller,” Gerritsen notes. businesses. For example, data can provide
insight on whether they should chase certain
The role of forecasting clients or not and it can help them recognise
To stay abreast of these changing patterns, the specific needs of their tenants.
real estate investors need to strengthen their These clients are also becoming more
forecasting capabilities. Having the ability to exacting, where a building is no longer simply
foresee change and adapt to it successfully space, but encompasses all the services
is critical for real estate investment managers end-users expect.
to remain competitive. This forecasting capac- “Ultimately, technology is a means to better
ity must be built on data and technology and service your clients, both in a commercial and
these two elements must become an integral residential environment,” Gerritsen says. “We
part of any business strategy in today’s world are moving to a future where technology will
rather than be relegated to the margins. be delivered directly and seamlessly together
“Data must sit at the core of everything an with a property – in the form of smart meters,
investment management company is doing,” smart locks, thermostats, etc.”
Gerritsen says. “It will help investment man- He explains how these services can also
agers anticipate potential crashes and steer be supported by real time data collected from
away from them.” physical buildings: “For example, having sen-
For this, the real estate industry must com- sors and data on the operation of the lifts in
pletely change the way it manages data. “As your existing buildings, and potentially those
an industry, real estate has, historically, first in properties outside your portfolio, can help
decided what data is relevant, then gone on you decide what type of lift to install in your
to gather that data and report on it. But this next investment. Therefore, such decisions will
practice needs to change,” Gerritsen stresses. no longer rely on a sales pitch from a man-
He explains this trend is now well in place ufacturer or company representative, but on
in the US and is a development Yardi believes actual data from the end users.”
will spread. “We are investing heavily in pro- This focus on data has the potential to
viding technology that improves the ability completely subvert the competitive landscape.
of investment managers to perform all kinds According to Gerritsen: “You could argue the
of forecasting and help them propose what future of real estate will be led less by the
needs to happen as a result.” traditional investment firms and more by
Due to the wealth of data available, tech- new companies that are data-driven.
nology can help investment managers predict It might also lead to the entrance of
certain factors, such as rent levels, which can the big data firms like Apple and
better support their investment decisions. This Amazon into the real estate space.
is not currently possible in the UK or Europe “There is so much that we
because there isn’t enough publicly available can do with data – we’re only
data. However, Gerritsen is confident this is scratching the surface at the
the direction of travel for the industry on a moment.” n
global scale.
Richard Gerritsen
Regional Director, Sales – Continental Europe, Yardi
Data is the future
Looking ahead, proptech will not only facilitate Richard combines a financial accounting background with over 20 years’
and drive growth but, perhaps more impor- experience in international software sales, sales management and business
development. He has served as Financial Manager, European Controller, Sales
tantly, it will help avoid decline. “Technology
Manager and Managing Director for several software companies before joining
will help investors and landlords safeguard Yardi, the global real estate technology firm, in 2005. As Regional Director,
their business and make it more sustainable Richard has a leadership role for sales and business development across
going forward. These solutions will become a Continental Europe, and continues to help the Yardi European organisation grow
from strength to strength.
core part of the whole interaction landlords and
PROPTECH IN FOCUS | Jul 2021 www.propertyfundsworld.com | 7
ESSENSYS
Creating flexible,
connected spaces
Interview with James Shannon
T
he commercial real estate market is changing rapidly resource to do it themselves, to deliver better services for
– for investors, landlords and occupiers. It’s not just their occupiers. Technology is a critical tool which allows
the profound impact of the pandemic on the prop- landlords and investors to be more active in the market.
erty market and the accompanying surge in companies Shannon says the pandemic has played an important
adopting more flexible working practices for their staff. New role in accelerating uptake of new technology in the indus-
technology is also reshaping the market, allowing com- try. “We have to recognise that the pandemic has been a
panies to embrace new products and services that are catalyst for proptech deployment,” he says. “The real estate
changing the way commercial spaces are let, used and market had already been demonstrating a growing need for
managed. In order to remain competitive, landlords and tech-driven, flexible workspaces. JLL predicts 30 percent of
commercial real estate investors need be agile. They need office space to be flexible in some form by 2030. This trend
to adapt quickly and provide the flexibility their customers has accelerated as a result of Covid-19.”
increasingly want. The pandemic has fostered the emergence of the ‘work
“Enterprise occupiers are looking for more than from anywhere’ ethos which, in turn, is bringing about a
just space,” says James Shannon, Chief Product and huge evolution in the world of real estate. It has under-
Technology Officer for essensys, a UK-listed company that scored the need for flexible and well-connected workspaces.
provides software-as-a-service and technology to the flex- Shannon says: “The more forward-thinking landlords and
ible real estate industry. “They’re expecting to license or investors see this opportunity and are looking for partners
lease a productive space. This means touchless access, to enable them to provide these services quickly.”
the ability to have booking availability and amenities.” Essensys develops software and technology that helps
These days, property management is becoming about landlords and real estate investors provide a “seamless
much more than just managing an asset. He says: “It digital experience for end-users”. The first step is to give
signifies the evolution from pure asset management to a occupiers the ability to easily browse and book space
dynamic service and hospitality delivery.” using a simple smartphone app.
In this new world, so-called proptech enables traditional “Following that, when people turn up at the building,
investors, who may not have the internal capability or their experience should be smooth – from going through
8 | www.propertyfundsworld.com PROPTECH IN FOCUS | Jul 2021
ESSENSYS
the turnstile on the ground floor to taking the He notes how geographical differences in
elevator, booking meeting rooms, interacting the way properties are managed also need
with printers and hot desks – our ultimate to be considered. These discrepancies may
goal is to make that journey, both digital and further hinder asset managers’ ability to fully
physical, as flawless as possible,” Shannon benefit from the technology available.
stresses. “Change takes time. Although the technol-
Better use of data also has an important ogy allows us to be very dynamic and agile,
role to play in the sector. Shannon explains: the organisation needs to be ready for it.
“Once a building is connected, you have real These solutions can generally be deployed
time data flowing and customers setting their very quickly but the asset manager will dictate
requirements as they use the space. That data the pace at which change will actually be real-
gives us the ability to measure and qualify ised,” Shannon says.
their needs, then filter those through to the This is what will drive differentiation across
necessary resources, inventory and staff. the industry; the landlords and investors able
“This is going to be a natural evolution to adapt more quickly are likely to be more
which moves first to flexibility, but then to successful. According to Shannon, the more
measurability. We aim to get to the point where traditional pure asset managers have been
we have a real-time feedback loop which not slower to the game: “The more advanced,
only gives the landlord and the investor better sophisticated hybrid type of investors and
data on how to fine-tune their product, but also commercial real estate asset managers are
helps to create a better environment which the already further down the technology path.
enterprise customers can deliver to their staff They might already be delivering tech-enabled,
in terms of productivity, connectivity and enjoy- flexible spaces and may be looking to deliver
ment of the physical space.” another next generation product.”
Cultural shift Investor advantages
To fully benefit from all of this technology, In addition to meeting the changing needs of
organisations need to fundamentally shift the their occupiers, deploying proptech solutions
way they view real estate. across a real estate portfolio allows landlords
“Traditionally, commercial real estate has and investors additional advantages. “Proptech
been quite siloed, not just geographically, but reduces time-to-value across a property port-
also functionally. Several elements like security folio, which accelerates return on investment,”
and connectivity might have been outsourced. Shannon remarks.
Now the approach needs to be more holistic,” In addition, industry statistics show cus-
Shannon explains. “Landlords and investors tomers are willing to pay a 15 to 20 percent
are having to work in a more coordinated and premium for technology-enabled space. “So
cross-functional manner.” having proptech solutions in place allows
This means certain functions need to be investors to charge more for space, which
taken into account much earlier in the build also enhances their return on investment,”
cycle. Things like security, visitor management Shannon adds.
and connectivity need to be designed at a However, he believes the more long-term
much earlier stage in the building process. and deep-rooted impact of technology solu-
Shannon says: “An organisational change tions goes beyond straightforward return
needs to take place. They are transforming on investment. Harking back to his earlier
from purely managing an asset to delivering comment regarding differentiation, Shannon
hospitality and services, which is a significant stresses: “Technology is all about being able
development. to deliver flexibility both commercially and
“The internal shift required to do this is one physically. It provides landlords and investors
of the greatest challenges we come across. with the ability to attract the most lucrative
Organisations need to adapt. We can pro- customers; the biggest multinationals with the
vide the platform to enable the technology for most demanding staff.” n
buildings but its full value can only be lever-
aged if organisations are themselves set up to James Shannon
Chief Product & Technology Officer, Essensys
manage this as well.”
PROPTECH IN FOCUS | Jul 2021 www.propertyfundsworld.com | 9
D I R E C TO R Y
ESSENSYS
Established in 2006, essensys is the world’s leading provider of software-as-a-service and
technology to the flexible real estate industry. We empower ambitious workspace providers
to meet the growing demand for flexible workspace solutions. Our secure, all-in-one platform
delivers digital infrastructure, effective space setup, seamless operations, and mobile-first occupier
interactions. It enables friction-free in-building experiences, instant control over processes,
technology, and occupier services, as well as clear visibility into space and service utilisation.
Contact: Amanda Fanoun | amanda.fanoun@essensys.tech
www.essensys.tech
YARDI
Established in 1984, Yardi has grown dramatically over the last three decades to become the
leading provider of high-performance software solutions for the real estate industry. Today, we
employ over 7,500 dedicated professionals working in over 45 offices throughout North America,
Europe, Middle East, Asia and Australia.
Since its founding, Yardi has set the standard for real estate software solutions with a combination
of responsiveness and technical innovation. We understand the unique needs of the industry’s
various segments and have the technical expertise and vision necessary to translate that
understanding into powerful solutions that meet and exceed those needs.
Contact: UK +44 (0)1908 308400 | The Netherlands +31 (0)20 565 0050 |
www.yardi.eu Germany +49 (0)6131 14706 3 | europe@yardi.com
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