Proptech is an expanding moniker for the intersection between tech “the disruptor” and real estate, “the great frontier”. Tech trends abound, but why do they matter? Will this make me money? What can my team learn from it? How do I filter value from hype?
These are the questions the large real estate partners we work with at Concrete are all asking. We believe that London, the epicentre of real estate and technology start-ups in Europe, deserves better, and we call on the sector to come together to create an ecosystem for collaboration, education and innovation in the proptech landscape. The working title, for now at least, is Proptech Central, a physical place at the heart of a new way of thinking to anchor this aforementioned ecosystem. So what would it look like in reality?
Why London?
For a start, we believe it must be in London for a variety of reasons. This is where the money is. Monaco aside, the price per sq ft of UK real estate is nearly double that of France, which comes in third place. This is even more evident in cross-border transactions – £5.6bn was invested in London in the first half of 2018, ahead of Hong Kong (£5bn) and Paris (£1.9bn).
Furthermore, venture capital investment in London alone is greater than that in any other EU country. Since start-ups, for the most part, rely on continuous VC flows, London is the place where they have the highest chance of success.
Finally, the UK is often is key to a start-up’s international growth strategy, be it US-to-Europe or Europe-to-US.
Why education?
We need the learning. Research commissioned by the British Property Federation identified two key recommendations:
- The UK real estate sector should create a collaborative real estate R&D hub or lab.
- The UK government should launch a real estate catapult.
These initiatives are about learning: we must dispense with the technical jargon and bring impactful innovations down to earth. We need to see them, touch them, and really understand what they deliver to customers. We need answers to questions such as: what’s delivering value today (marketplaces, digitising workflows, sensors); what’s coming soon (big data/machine-learning, flex everything); and what should I keep my eyes on (blockchain, VR/AR, robots)?
The gains from these innovations should not be limited to the founders and VC investors who are piling into the R&D spending gap for real estate. It’s the real estate companies that will make the proptech winners successful.
For real estate players to truly engage with proptech, we need a place where industry professionals can better understand what will work for them. We need an exhibition space, a maker-space, seminars from engaged universities. We need start-ups to show the industry what they do. We need investors to help start-ups and corporates understand what it takes to create winning digital strategies. We need corporates to engage in their digital innovation work in this space.
Location, location, location, has never been more applicable, and one central hub for innovation will magnify the learnings for those who participate.
Why an ecosystem?
Finally, we need to create a community ecosystem. From a tech founder and investor perspective, we deeply admire the success that the Silicon Valley ecosystem has produced. One of the main catalysts for this success is that the stakeholders are all there. Bright graduates, successful repeat founders, expert workers, deep pools of capital, and lots of customers create innovation.
Let’s do the same for Europe, in London. European real estate needs everyone to come together to build what this ecosystem needs: relationships, discovery and collaboration.
Relationships, above all, keep the gears of real estate moving. MIPIM in Cannes, France? Yep, it’s a better place for me to catch up with key London colleagues than any given three days of toil here in the capital.
Discovery is what we are here for. What’s new, what’s worked and what hasn’t? These are the key questions on the minds of those trying to deliver value.
Collaboration. Concrete calls on all players in the ecosystem to work together on a non-exclusive basis. No need to hand over the keys to your kingdom, but be prepared to share some learning and a bit of data in exchange for new insight.
You may wonder what the ROI case for all this is. It’s pretty simple: learn more, faster, and better. Build key relationships, deliver real value to your bottom line.
We call on the real estate sector to embrace the potential of proptech and actively participate in this cycle of innovation to make London the epicentre of this new wave of transformation. If you agree, come talk to us, and let’s make it happen.
Taylor Wescoatt is general partner at Concrete Venture Capital
