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Proptech energizes real estate sector

By WANG YING in Shanghai | China Daily | Updated: 2020-08-19 09:02

Potential homebuyers in Nantong, Jiangsu province, use VR equipment to visualize how a property project will look upon its completion. [Photo by Xu Jinbai/For China Daily]

Proptech is fast becoming the buzzword for the real estate industry in China thanks to its enhanced human experience, operational excellence, safety and health, as well as digital drive, a new report said.

Broadly, proptech refers to the application of technology in the property industry. Global real estate consultancy JLL said in a recent white paper that China is witnessing an early-stage development of the proptech ecosystem jointly created by real estate enterprises, technology companies and relevant professional organizations. The constant interaction between real estate and technology companies is going to generate ideas, promote integration, and create value for the sector as a whole.

Proptech also refers to a wide spectrum of digital and technological trends in the real estate industry involving technologically innovative products like digital business models, smart buildings and smart cities.

The white paper-Reimagine the Future of Real Estate-comes at a time when China's commercial real estate market is facing internal pressure due to intense competition and rising uncertainties from external factors and events this year.

The report, based on responses from over 200 proptech companies and key stakeholders in China, summarizes the application scenarios, technical characteristics and enduser demands of 12 key property technologies including cloud computing, big data, artificial intelligence, the internet of things, building information management, virtual reality or augmented reality, indoor navigation, robotics, 5G, blockchain, unmanned aerial vehicles and autonomous vehicles.

KK Fung, CEO of JLL China, said: "Proptech is the key growth engine for the re-imagining of the real estate market. By enhancing the resilience of any commercial property, proptech can mitigate potential market risks and maximize long-term asset values."

The report said proptech empowers a property from four perspectives-human experience, operational excellence, safety and health, and digital drive. The implementation of proptech in a commercial building enhances the capability to respond and mitigate risks for landlords, developers and investors.

"In addition to cost reduction and productivity improvement, the enhancement of health and safety or human experience should also become an effective measure of valuing proptech in the post-COVID-19 era," said Fung.

"Real estate consumption has created several opportunities for technologies to be part of the sector upgrade process," said Yan Yuejin, director of Shanghai-based Ehouse China Research and Development Institution.

Proptech investment has grown rapidly during the past five years and hit a record in the first half of 2019. "China is one of the most dynamic markets for proptech in the world. One of the key changes in the commercial real estate sector is the quest for experience services ...The future is software plus services combining life, work and play," said Jack Woo, head of digital and technology with CBRE North Asia.

Flexible spaces, experience services, smart building, online listing platforms and brokerages, and space visualization are some of the industry-specific trends that are reshaping the overall landscape of China's commercial real estate industry, said Woo.

"From design and construction to maintenance, renovation, and further to the enhancement of conformability and living experience, there are enormous opportunities in embedding technology into the residential sector alone, especially with regard to the Chinese market," said Chen Jie, a professor specializing in property research at Shanghai Jiao Tong University.

"The proptech ecosystem in China is still in its infancy. In the future, it will further accelerate the digital transformation of the country's real estate industry in terms of integration, efficiency and talent development... We believe that the digital transformation will not only lead to sustainable growth in the long term but reshape the future of the industry," said Fung.

"In our view, the application of proptech in the next few years will bring new development opportunities for the real estate industry as a whole. Globally, it is still a new concept, but it will have an impact on the property sector and create enormous opportunities," said Zhang Ying, managing director for JLL North China.

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