The turn of a year always provides a great opportunity to look back on what we’ve learnt and how we can implement these learnings into the year ahead positively. Coronavirus has undoubtedly been a focus in meeting rooms all over the country for the past two years. Whether it’s been the need to implement technologies to allow employees to work from home, or assessing how consumer purchasing behaviours have changed, businesses have had to adapt quickly.
As the digital era continues to grow and develop, the real estate sector has an opportunity to take advantage of platforms already available and implementing them to enhance its offering to customers and the effectiveness in which it operates.
As the leading provider of digital platforms for real estate assets in Europe, we see the following trends and developments for 2022.
Technology developments and acquisitions are on the rise
When it comes to embracing technology, the real estate industry undoubtedly has some catching up to do. However, there is a clear acknowledgement of the need to evolve and a willingness to invest. Research1 we conducted last year revealed almost nine out of 10 (87%) respondents expect to increase their technology budget over the next two years, including 20% who see it as very likely and 26% as rather likely.
As a business, Drooms will look to learn more and expand further to ensure we continuously innovate and break boundaries to generate real added value for our customers. Our recent acquisition of a 10 percent stake in DocEstate, a PropTech company which digitises public authority requests and simplifies access to information, clearly illustrates our desire to continue taking strategic steps in this direction. DocEstate’s offering will be integrated into Drooms’ real estate software, enabling official documents to be digitally requested within its platforms.
Digital platforms need to work together to increase efficiency
This acquisition is a prime example of how platforms can work together to create more efficient workflows but connectivity between systems, using application programming interfaces (APIs), is still a weak point within the industry.
A large number of deals within real estate rely on a growing amount of data. This means the reliance on multiple solutions to address complex requirements continues to grow as businesses develop. To stay ahead and provide a product which delivers necessary functionality for clients, companies will need work together to integrate platforms to talk to each other.
Our API makes it possible for clients to link their virtual data rooms with other software systems. Customers can choose the extent to which they integrate Drooms’ software and add-ons to their proprietary IT systems and select the key features needed for their specific use case. In addition to optimising data management practices this allows users to save time working between applications and reduces risks associated with manual workflows and information silos.
Breaking the knowledge barrier
As previously said, the real estate industry in Europe is not known for being early adopters of new technology. From our research, almost half (48%) of respondents cited a lack of knowledge about existing technology as the main challenge to implementing technology in the real estate industry.
Foreign words or different vocabularies are also used to describe technologies, causing misunderstandings and breakdowns in communication between people. Term mix ups could make it difficult for real estate professionals to pinpoint their application programming interfaces true relevance.
We’ve seen a lot of companies be hindered by their own inertia and reluctance to change long-term practices. We understand that introducing new technologies can require many levels of approval, especially within larger organisations, and so much so, that it might be questioned whether the benefits are worth the effort. However, more often than not, perseverance and implementing these tools pays off and allows a business to be more coordinated and organised.
Virtual data rooms (VDR) have gone a long way to meet the technological needs of the real estate sector over the last two decades. They are secure online platforms for accessing confidential documents and managing business processes. To real estate transactions, they can bring efficiency and a range of functionalities and even enable management of assets throughout their lifecycles.
How can ESG play a part in real estate
With the world looking to improve its carbon footprint, the real estate industry has its part to play, which could bring a whole new set of challenges.
Research2 we commissioned cited sustainability as the most significant trend going forward.
Given that buildings and construction have a tremendous impact on our environment and society, it is no surprise that sustainability is now and will continue to be at the forefront of the real estate investment industry for years to come.
The European Union is leading the way globally in regulating ESG and has called for sustainability to be made visible, risks to be disclosed and climate targets to be met. In March 2021, the EU’s Sustainable Finance Disclosure Regulation came into force and the reporting of sustainability criteria became obligatory, including for players in the real estate industry. As of 1 January 2022, investments are measured and scrutinised for their sustainability credentials.
With this in mind, there is not only a need for real estate fund managers to invest responsibly and sustainably as it is the right thing to do for the future of our planet and for society as a whole, but moreover, to respond to the demands from clients, regulators and politicians alike to transparently report and demonstrate how they are doing so.
Digitisation can play a role here as it provides data and evaluation platforms for successful ESG management.
The use of software tools will be crucial to real estate companies to efficiently and clearly prove their commitment to ESG.
What’s next for the real estate industry
If real estate professionals are to address these digital opportunities fully, they will need the right tools. There is no doubt that digitisation is becoming a reality for more and more firms, and a key characteristic of the winners in an increasingly data-driven world.
Drooms PORTFOLIO transparently combines all stages of the entire lifecycle asset management process onto a single platform. It does not require any additional technologies, which is not only a sustainable but also a highly efficient solution.
2022 offers a lot of exciting opportunities for us and the industry as a whole. As the industry becomes more comfortable with the idea of digitisation, we will continue to drive it forward and pursue opportunities to further streamline asset lifecycle management processes.
Would you like to learn more about the importance of integrating ESG into real estate asset management?