London, November 2020 – Six months on from the lockdown instigated in March 2020 due to the onset of Covid-19, Drooms has surveyed approximately 540 institutional real estate investors in Europe to examine how the pandemic has impacted the adoption of digitisation within the European property market. The results were surprising: at 41%, the most common response was that the European property market had not been significantly influenced by digitisation over the past six months, while only 24% believe that digitisation has had a major impact on the sector.
Alexandre Grellier, CEO of Drooms, explains: “The coronavirus pandemic has had an impact on the digitisation of the commercial property market, albeit not to the expected extent, given that the industry is still performing well, despite the challenging environment. Our study highlights the need for executives to drive forward the implementation of digital solutions to achieve greater efficiencies, lower costs and higher productivity. We would recommend firms to undertake a careful review of their business processes, to determine which can and should be meaningfully digitised to enhance business performance”.
The Europe-wide study reveals that over two in five (43%) institutional real estate investors believe digitisation will increase the efficiency of businesses processes. A further 30% expect it could result in a dramatic reduction in costs and 27% believe it could lead to the creation of significative competitive advantage.
A lack of connectivity between systems impedes seamless work processes
When asked what the key weaknesses are in European real estate technology, the lack of integration between different systems and platforms used in the sector emerged as the key vulnerability in the sector, according to 44% of respondents. Almost one third (29%) cited the lack of applications available to replace paper-based processes used currently as another key challenge.
Commenting on the findings, Grellier adds: “We have noticed for a long time that firms are calling for greater connectivity in their business processes. For this to be achieved, the practical use of interfaces between software solutions is key. At Drooms, we are facilitating this through the opening up of our API. We connect our virtual data room platform to other systems enabling asset managers to save both time and workload effort, and reduce costs”.
Remote working and more integrated technology identified as key themes going forward
More than 36% of respondents believe that remote working will be the most important theme for the real estate market going forward. This is followed by the expected arrival of more integrated technology that will improve efficiencies across the whole real estate value chain, according to 28%.
The huge shift in how organisations manage their operations exposes the need for business leaders to address their data transfer needs, as security and speed of transfer become key priorities to ensure the smooth running of remote working teams. IT departments must be well-prepared to ensure that large documents can be made available at any location. Enabling a structured storage platform across appropriate systems would also help teams to continue working digitally and seamlessly. Here, Grellier advises that, while it is good to have a system in place, over-organising things can have a negative impact: “Although it is important to keep to a certain standard, “over engineering” doesn’t help anybody. Through auto-allocation and self-learned algorithms, systems can help users to automatically index documents”.
The study was a quantitative survey using an online questionnaire consisting of seven questions. Customers and interested parties in Europe were invited to take part in September 2020 via email. A total of 538 real estate experts responded.