THE CHALLENGES OF THE PROPTECH RE

THE CHALLENGES

OF THE PROPTECH REVOLUTION

ANDRÉS LEAL PROPTECH ENTREPRENEUR, CEO TRIARII AND FOUNDER AND EX MANAGING DIRECTOR OF PROPTECH COLOMBIA ASSOCIATION

The Real Estate industry in the world is one of the most important sectors of the global economy with very relevant actors such as real estate funds, builders, developers, retail and industry, along with asset operators and banking. However, it is one of the least digitized industries with little investment in innovation and technology for the customer. The good news is that we are beginning one of the most important transformations in the real estate and construction industry: the Proptech revolution that has already begun to transform the entire value chain of the real estate and financing activity. What is Proptech? It is an acronym of two words, (Property & Technology) and it is the innovative use of technology to make real estate services and products more efficient through new business models. Just as other industries have made the leap towards innovation such as the transportation sector with Uber, Nubank in the financial sector, now it is the turn of real estate. Although Proptech is not entirely new, since companies such as Airbnb, Quinto Andar and Autodesk, among others, have been part of this digital disruption for several years now.

From smart platforms there are solutions to build, buy, rent, sell, as well as solutions to improve the consumption of resources in buildings, robots in construction projects, real estate algorithms, data exchange for property management, sensors in cities, platforms of financing or drones. These are some of the technological solutions that a digital ecosystem has developed in this sector in Colombia.

In this way, the digital evolution in a sector that lags behind in terms of innovation and digitization is today led by Proptech companies with market potential not only in Colombia but also in the region, which in turn, have as their main purpose to make it easier to life of users in the development of the value chain.

Although it is clear that technology brings benefits for the industry and users, there are still enormous challenges for this to happen in one of the most traditional sectors and with complex problems in the coming years if the necessary investments are not made so as not to be left behind. A recent KPMG Global PropTech survey found that “86% of the industry sees digital and technological innovation as an opportunity,” so are we going to seize it?

CHALLENGES

Next, the challenges that the real estate and construction industry has to develop the Proptech ecosystem in Colombia:

The first challenge is the mindset, the development of digital and data culture by the industry. Innovating is risky, but companies that don’t innovate disappear. This will

prevent Proptech companies from developing and growing in Colombia. For this reason, the industry will continue to lose competitiveness, growth and improve its productivity rates. This will generate a migration of entrepreneurs and innovation to other markets with more open entry of digital solutions in this sector and of venture capital.

Similarly, the lack of regulation that allows the development of Proptech businesses generates uncertainty for entrepreneurs and users. Some Proptech segments need regulation that transmits security to users on digital channels. Hence the importance of the suitability of companies in the management and protection of data to achieve satisfaction of customer interests and the elimination of conflicts of interest that promote the development of digital businesses. Certain regulatory issues that impact some segments of the Proptech are: Data protection and privacy, customer knowledge, digitization of property purchase / sale / rental contracts, housing user protection, among others.

Finally, the main challenge for the Real Estate and Proptech industry will be digital talent, training the next generation of professionals. Automation is imminent, and these new companies need different profiles and skills that will be required by the industry. For example, Singapore-based real estate developer CapitaLand plans to invest nearly $ 3.6 million to enhance the skills of its workforce in areas such as data analytics, blockchain, and cybersecurity.

SOLUTIONS AND COMMITMENTS

This is a panorama of challenges that the real estate and traditional digital industry is facing, which is why the importance of working collaboratively between all the actors that participate, regulate and develop the Proptech sector in Colombia, always seeking that the ecosystem generates trust in the users. Under this idea of collaboration and digital inclusion, the consolidation of the Proptech ecosystem in Colombia will be the basis for growth and consolidation with important advances in regulatory matters, as the Financial Superintendence of Colombia has been developing in areas such as crowdfunding with resolution number 0091 of 2021, the Ministry of Housing with the notarial digitization project, allows the development of the innovation of new Proptech, which as has been happening until today, was also the purpose of creating Colombia Proptech as the most important technology hub in Latin America in the Real Estate and construction industry.

We should be proud that the Colombian Proptech ecosystem is already on the global industry map today: we were nominated for the best Proptech association in New York competing against the United Kingdom, Japan and the Netherlands. This is a reflection of the work promoted by the sector that integrates Digital Marketplaces for the purchase, sale and rental of housing, Digital Platforms for suppliers of the construction sector, Mortgage Credits, Real Estate Crowdfunding, Smart Buildings, Sensors in Smart Cities, Internet of Things, Blockchain and Asset Tokenization, Digital Twins for the development of construction and infrastructure projects, Facility Management, Big Data and Artificial Intelligence, as some of the technologies that are already digitizing the entire industry.

Based on the foregoing, Colombia should continue to advance in the development of legal frameworks that influence the development of technologies, increasing incentives and including appropriate liability rules to integrate these new service and product providers. For this reason, it is important to highlight that the ecosystem continues its maturation process, working hand in hand with other unions, academia, builders, government and new Proptech startups that consolidate the country as one of the best in the race for Proptech innovation. the region.