DATA DRIVEN COMPANIES WILL DELIVER SERVICE FOCUSED REAL ESTATE

Interview with Richard Gerritsen

There’s no doubt that technology has the power to transform the entire real estate value chain. Investors, asset managers, landlords, tenants and residents all need to be ready for this shift. The change will result in a closer relationship between investors and the end-users, eventually creating a better experience for everyone. On one level, it’s no surprise that the real estate industry is embracing new technology. After all, ordinary consumers now expect far greater levels of convenience as services like home delivery have mushroomed, allowing them to order virtually anything with a few taps of their smartphone.

Real estate transactions, which are of much higher monetary value, should naturally offer end-users the same level of comfort, ease of use and accessibility.

Richard Gerritsen, Regional Director Europe for Yardi, says: “Technology has a tendency to cut out the middleman and therefore the whole value chain will start to develop into something new. Operating models will be different, driven by automation. This means business and revenue models will also change.”

As a firm, Yardi is a strong advocate for a single solution approach and is investing heavily in this area. “We strongly believe having managers, external suppliers and tenants all working on the same platform will lead to a completely different experience of real estate,” Gerritsen says.

Operationally, the difference will be fundamental. Gerritsen elaborates: “While currently, property managers, asset managers and investors each work in their own systems, a single platform approach means that operations will become much more fluid. Data will be accessed and utilised in a seamless way, but this is something that will happen over time.”

It’s a transformation that will take place throughout the real estate industry and it is also resulting in buildings being viewed as a brand rather than just a physical space that’s simply leased. This is vitally important as companies choose their workplaces based on service and the environment in which they want their employees to work. Providing space as a service should be a fundamental part of a real estate strategy moving forward and deploying the right technology can help facilitate state of the art services that will successfully attract tenants.

“Investors have begun managing their property’s brand. By using some of the bigger operating platforms and providing services that residents and tenants desire, the gap between the investor and the actual “user” of the property becomes much smaller,” Gerritsen notes.

The role of forecasting To stay abreast of these changing patterns, real estate investors need to strengthen their forecasting capabilities. Having the ability to foresee change and adapt to it successfully is critical for real estate investment managers to remain competitive. This forecasting capacity must be built on data and technology and these two elements must become an integral part of any business strategy in today’s world rather than be relegated to the margins.

“Data must sit at the core of everything an investment management company is doing,” Gerritsen says. “It will help investment managers anticipate potential crashes and steer away from them.”

For this, the real estate industry must completely change the way it manages data. “As an industry, real estate has, historically, first decided what data is relevant, then gone on to gather that data and report on it. But this practice needs to change,” Gerritsen stresses.

He explains this trend is now well in place in the US and is a development Yardi believes will spread. “We are investing heavily in providing technology that improves the ability of investment managers to perform all kinds of forecasting and help them propose what needs to happen as a result.”

Due to the wealth of data available, technology can help investment managers predict certain factors, such as rent levels, which can better support their investment decisions. This is not currently possible in the UK or Europe because there isn’t enough publicly available data. However, Gerritsen is confident this is the direction of travel for the industry on a global scale.

Data is the future Looking ahead, proptech will not only facilitate and drive growth but, perhaps more importantly, it will help avoid decline. “Technology will help investors and landlords safeguard their business and make it more sustainable going forward. These solutions will become a core part of the whole interaction landlords and investors have with the market, their clients and their business overall,” Gerritsen says.

Having access to information about potential clients can give landlords a better understanding of how to future-proof their businesses. For example, data can provide insight on whether they should chase certain clients or not and it can help them recognise the specific needs of their tenants.

These clients are also becoming more exacting, where a building is no longer simply space, but encompasses all the services end-users expect.

“Ultimately, technology is a means to better service your clients, both in a commercial and residential environment,” Gerritsen says. “We are moving to a future where technology will be delivered directly and seamlessly together with a property – in the form of smart meters, smart locks, thermostats, etc.”

He explains how these services can also be supported by real time data collected from physical buildings: “For example, having sensors and data on the operation of the lifts in your existing buildings, and potentially those in properties outside your portfolio, can help you decide what type of lift to install in your next investment. Therefore, such decisions will no longer rely on a sales pitch from a manufacturer or company representative, but on actual data from the end users.”

This focus on data has the potential to completely subvert the competitive landscape. According to Gerritsen: “You could argue the future of real estate will be led less by the traditional investment firms and more by new companies that are data-driven. It might also lead to the entrance of the big data firms like Apple and Amazon into the real estate space.

“There is so much that we can do with data – we’re only scratching the surface at the moment.” n

Richard Gerritsen Regional Director, Sales – Continental Europe, Yardi

Richard combines a financial accounting background with over 20 years’ experience in international software sales, sales management and business development. He has served as Financial Manager, European Controller, Sales Manager and Managing Director for several software companies before joining Yardi, the global real estate technology firm, in 2005. As Regional Director, Richard has a leadership role for sales and business development across Continental Europe, and continues to help the Yardi European organisation grow from strength to strength.