What is
PropTech
What is PropTech?
PropTech Research 1st Edition
Language: English
Published by PropTech Switzerland July 15th, 2020
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Foreword WE ARE PROPTECH SWITZERLAND The PropTech Switzerland is a research lab for innovation in the real estate industry that links innovation, technology and sustainability impact. As unique innovation space for the real estate community, the research center primary objective is to create an intellectual community of multi-disciplinary researchers for developing professional work on innovation that impacts the development of the real estate industry. Our pioneering research investigates the innovative solutions in real estate industry from initial concept to market reality, providing breakthrough knowledge to help organizations, companies and startups capitalize on today’s dynamic markets and technologies. PropTech Switzerland is uniquely positioned to help the industry increase its efficiency, prosperity, and social responsibility. Through research and education initiatives at the research center, PropTech Switzerland applies its tradition of excellence in technology, knowledge transfer, and global reach to the real estate industry, developing innovations to help practitioners build responsibly and profitably. A unique, interdisciplinary research platform linking technology with industry to meet the need for more informed decision-making and the implementation of best practices. A network of global outreach that links the real estate industry with the digital transformation and with PropTech Switzerland leading-edge research in science and technology. Envisioning the industry’s integrated stewardship of its land and products, the PropTech Switzerland provides tomorrow’s practitioners with the means to transform an ever more vital, global, and complex market. Our main areas are; Academic Research Education & Innovation Trend Analysis Investigations of Business Models The development of Service and Product in real estate industry. We publish regularly PropTech Book, Startup Guide, Innovation Index, Proptech Directory, PropTech Homepages Analysis and studies about new business models. PropTech Switzerland is a non-profit organisation and is financed just with membership-fees. That’s why we work neutrally and objective for PropTech Ecosystem in Switzerland. PropTech Switzerland Team Deniz Karahan Tayland Karahan Katharina Clavel
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Copyright
What is PropTech? Copyright © 2020 by PropTech Switzerland All rights reserved. No part of this publication may be reproduced, distributed, or transmitted in any form or by any means, including photocopying, recording, or other electronic or mechanical methods, without the prior written permission of the PropTech Switzerland, except in the case of brief quotations embodied in critical reviews and certain other noncommercial uses permitted by copyright law. The report and any opinions expressed in this publication are the sole responsibility of the authors. They do not purport to reflect the opinions or views of PropTech Switzerland Members or the PropTech Switzerland management. When content, such as an image, graphic, data, trademark, or logo, is attributed to a third party, the user is solely responsible for clearing the rights with the right holders. For permission requests, write to the PropTech Switzerland, addressed “Attention: Permissions Coordinator,” at the address below. PropTech Switzerland Deniz Karahan Solothurnstrasse 16 2543 Lengnau, Switzerland www.proptechswitzerland.com Ordering Information: Orders by PropTech Switzerland. Please contact: info@proptechswitzerland.com or visit www.proptechswitzerland.com. Suggested citation: Deniz Karahan, Tayland Karahan, PropTech Switzerland Created in Bern, Switzerland, by PropTech Switzerland. Cover design by Tayland Karahan
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Contents Preface: Releasing What is PropTech Foreword: We are PropTech Switzerland Copyright Content
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What is PropTech Who is PropTech The criteria of PropTech Tasks of PropTech Community The benefits of PropTech
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PropTech Switzerland Ecosystem
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PropTech Sectors Marketplace Property Sale & Buy Platforms Transaction Matchmaking Platforms Bidding method IBuying business model Real Estate Investment Crowdinvesting Market Property Management Planning Control Monitoring and Reporting Management Services Management providers Construction Automated and Robotic Construction for Sustainable Building Building Information Modeling Developing cloud-based virtual community model Digital Twin Green Building Simulation Model Smart Buildings & IoT Smart Buildings Internet of Thing Green Buildings Building energy simulation Energy optimization Automated energy accounting Virtual Reality, 3D, Augmented Reality and Drones Big Data Analytics Valuation Models Real Estate FinTech PropTech & FinTech Common Paths Services Providers
5 6 – 11
Our Selected Publications Sources, References & Appendix
36 37
12 – 14 15 – 16
17 – 21
22 – 24
25 – 27 28 – 29 30 – 31 32 – 35
What is PropTech? The property technology with short form “PropTech” is reevaluation of the real estate industry through technology-based solutions and innovative business models. The technologies made the PropTech revolution possible. “PropTech is one small part of the wider digital transformation of the property industry. It describes a movement driving a mentality change within the real estate industry and it consumers regarding technologydriven innovation in data assembly, transactions, and the design of buildings and cities” (Andrew Baum and James Dearsley, reported in Davenport, 2019). Proptech is the acronym used to describe any technology for the real estate space. This can span software, hardware, materials or manufacturing. “The major technologies driving the fourth industrial revolution. These are: - Websites and Smart Phone Apps - Application Programme Interfaces - Data Analysis and Visualisation - The Internet of Things - Artificial Intelligence and Machine Learning - Blockchain and Distributed Ledger Technology (DLT) - Sensors - Virtual and Augmented Reality - Geospatial and 5G technologies - Cloud computing - Transport Tech: Drones and Autonomous Vehicles - Other technologies” (1) PropTech is designed to streamline and connect processes for participants in all stages of the real estate market, including buyers, sellers, brokers, lenders and landlords. Who is PropTech? PropTechs are, the companies which develop and implement technology-based solutions for new and existing problems in the real estate industry. They are offering technologically innovative products or new business models for the market. It stands for all the companies that are taking on the real estate industry to make it better, spurred by an ever-changing digital landscape and new consumption patterns. The Criteria of PropTech 1. Developing technology-based solutions for new and existing problems 2. Developing the new business model for reducing bureaucracy between B2B and B2C. 3. Developing the new service and product for sustainable properties 4. Developing the new solutions to reducing the energy consumption 5. Developing the artificial intelligence-based database for market, property, and location analysing 6. Innovative solutions for life and working quality in properties 7. Innovative solutions to reducing cost of properties 8. Creating transparency with machine learning and artificial intelligence in real estate market.
The tasks of PropTech community PropTech ecosystem is an interconnected, interdependent network of various actors that combine to create innovative products and services in real estate industry. These actors primarily include tech startups; more established tech companies; tech founders; investors and investment groups; and mentors and organizations that provide business support. To help smaller companies to bring innovation to the market, Bring startups and founders together in a network, to overcome problems and share each other’s experiences, Build network between tech companies and investors, Develop the projects of tech companies for market entrance, Research PropTech sectors to support tech companies with knowledge and market analysis.
The benefits of the PropTech There are several ways in which developments in PropTech can benefit the real estate industry. It’s not only a lucrative path for investors, but new tools are helping millions of buyers, sellers and landlords to improve property journeys. So both, companies and users can profit from property technology. 1. Increased innovation in the real estate industry We’ve heard about the speed at which PropTech is making waves in the industry. But there is much more: Big data can supply information and knowledge necessary to make informed decision, which makes it more practical to buy and sell more properties. Sensors, big data and data analytics enable the real estate market to innovate more. That’s also the main reason why investments in PropTech companies increased in recent years. 2. More transparency New technologies such as big data or blockchains particularly improve transparency. Various tools can help people to track their property transactions at the touch of a
button. Since each party involved will have visibility of every transaction, greater transparency is possible. No surprise that the Global Real Estate Transparency Index was established. It has become the leading industry benchmark for assessing market transparency and continues to guide the sector towards higher standards. 3. Enhanced promotion Technology can assist with many problems faced by property managers such as sourcing tenants or the promotion of a property. From floorplans and galleries to online tours: The expansion of 3D virtual tools enables real-estate agents to promote an existing property or upcoming development. 4. Improved occupancy But also, the administrative processes in your property can be digitized. There are a lot of rental platforms or apps in which tenants and landlords can find each other easily and reduce vacancies. And of course, a digital access management solution also helps you to allocate individual rooms faster and more flexibly. The space capacities can therefore be utilized more effectively. 5. Better communication Many PropTech companies focus on setting up messaging services to heighten communication between landlords and tenants. A lot of these platforms provide access to documents or forms for claim reporting. So property managers can leave relevant information about the property on a whiteboard, while owners can respond directly to tenants requests. Less misunderstandings and faster answers are the result. Here you can find some useful apps for property management. 6. Higher value All these scenarios can ultimately increase the value of a real estate, which in turn will result in higher rental returns. Just think of it. Buildings with PropTech will probably be associated with quality and seen as more valuable than buildings that is not provided with PropTech. Different Proptech applications can have a huge impact on real estate. The strength lies in the combinations of them, which offers additional value. Naturally there are more than six benefits of PropTech. Property technology is the use of information technology to help individuals and companies research, buy, sell and manage real estate. Similar to the way FinTech focuses on the use of technology in finance, PropTech uses digital innovation to address the needs of the real estate industry. Nowadays, digitalization influences nearly every aspect of our life. The seemingly endless global flow of digital information has revolutionized not only our economy by creating manifold application opportunities. In fact, the Internet of Things, Big Data, and digital innovations embody a megatrend. While this development offers various intriguing opportunities, it also includes manifold serious challenges. Besides data security and property rights, one of the biggest questions to answer is whether we can shape a sustainable digitalization. (1) PropTech 2020: The Future of Real Estate, 2020, Said Business School, University of Oxford
PropTech Switzerland Ecosystem The ecosystem has grown 15% in first half-year. 175 PropTech companies, 319 Founders, 500 Board members and 2912 employees were registered till May 30th, 2020. The statistics of the companies according to the sectors;
Marketplace Investment Property Management Construction Smart Buildings & IoT Virtual Reality & 3D Big Data Analytics Valuation Model Real Estate FinTech Totally
2019 25 11 26 30 12 17 14 4 12 151
First Half-Year 2020 28 11 31 35 17 20 16 4 13 175
Marketplaces, such a matchmaking platform for transaction and rent are still attractive for the new business models. Only 20% of the marketplace companies offers service for house sale & buy. Rental platforms for matchmaking and PaaS for transactions and customer relations get the most user traffic. Property Management and Construction sectors are playing an important role in real estate industry. That’s why a lot of peoples focused to create new models for currently tasks and problems. The cloud solutions (like PaaS and SaaS) are most used and develop business areas for Location analysis, building analysis, space analysis, construction and Building performance. According to the news only two PropTech companies raised their funds during the Covid19. Locatee AG secured $4 million in Series A funding, secured from San Francisco based FYRFLY Venture Partners and Zurich based Tomahawk VC. Archilyse AG closed the Series A funding round. The first closing with CHF 3 million which will be followed by a second round of additional CHF 1 million in mid-2020. Smart Buildings & IoT solutions were the most discussed themes at the beginning of 2020. The amount of the companies has grown about 25%. The Internet of Thing was the hot discussion by state, cantons and in real estate market. Big Data Analytics with artificial intelligence and machine learning were realized, how they important for space analysis, building performance and valuation. Some of the companies were very active and started to analysis the new extraordinary situation to find solutions for new workplaces, customer relations and transactions. Generally we can say, the all PropTech companies were active, operate with partners and built new cooperation's during the lockdown. They react very fast and reorganize their companies and build new bridges for customers and investors. They benefited from digital solutions, but they had financial difficulties in the short term.
Creditworld was founded in 2015. As a direct lender, creditworld brings Swiss SMEs together with investors. This enables us to offer tailor-made financing solutions for Swiss SMEs and at the same time enable investors to invest in the cornerstones of the Swiss economy. With our own financing vehicles we are able to grant business loans from CHF 100,000 quickly and easily. For larger SME financing, we count on our broad investor network, through which we can process business loans of up to CHF 25 million. bob Money is a dedicated team of finance and technology experts and is a 100% subsidiary of the Valora Group. They offer many kind of credits such a renovation, construction and SME’s credits. eny Finance was founded in 2012 as a next-generation financial service provider, making it one of the first Swiss FinTechs. eny Finance offers simple property loans as an attractive replacement without burdening the mortgage.
Our selected publications in 2020
Published: January 14th 2020 Format: eBook PDF Page: 312
Published: June 22nd, 2020 Format: eBook PDF Page: 109
Published: April 7th 2020 Format: eBook PDF Page: 624
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PropTech Switzerland