PropTech; what will the real estate sector look like in five years?

Being able to meet client’s demands is also a matter of understanding where you are missing the mark, as Csongor Csukás explained; “Two years ago we realised we weren’t completely meeting our client’s expectations, which is why we decided to put together new initiatives, based on challenging ourselves to comprehend where our value proposition lies. This was based on understanding the key values that we were offering our clients. I believe if you don’t react to new technology, you will ultimately be unable to truly serve your clients.”

New initiatives included re-working the traditional relationship with a client, creating a much more user-centric model, which values the experience of tenants and focuses on human interaction. It is vital to focus on proximity, after all employees who occupy an office building are humans with emotions and feelings, to better serve them we need to understand the human elements of property management and combine these with extracting data on a range of interactions such as building performance and the interaction and data collection of a building within its environment.  

Csongor Csukás clarifies this point by saying, “As Property Managers we can have a vision of both of these elements. By combining data from human interactions, Property Managers can collect, extract and analyse data to understand the values for the investors and occupiers. This will in turn help with benchmarking and offer investors a unique type of expertise when it comes to the management of a building. This is therefore going to make the building effective to both the owners and the users.”

The panel at the PropTech conference then went on to discuss how technology creates efficiency and transparency in the market, thanks to companies using innovation, technology and data to greater extent. Asked what BNP Paribas Real Estate Property Management will look like in the next decade, Csongor Csukás replied,

“I believe 80% of what we do will be automated, so carried out either by Artificial Intelligence (AI) or algorithms. The 20% that remains human is still extremely important as human relationships continue to be crucial.”

So, how does this changing way of working affect the business of real estate? In Property Management Csongor Csukás predicts that data will be collected more thoughtfully. Data that is captured when managing a building is extremely important, as no longer are buildings isolated from their environment but are instead connected to the wider community.

While Property Management on an initial level focuses on the management of a building, it is also about understanding and valuing human interactions, so a Property Manager will now need to measure user’s well-being levels. It is therefore imperative to combine human interaction with data that reports on a building in order to measure and understand if it is successful or not.

This is where the job of a Property Manager becomes crucial as a building’s success is directly influenced by its users and satisfaction levels by understanding what success means for a building, in this regard all assets classes are affected by individual choices and behaviour. An example of this is the changing way in which retail operates. For example, consumers are becoming less likely to buy products directly in store. This however, does not render a shop useless as consumers now want to experience the brand by visiting the shop and physically being able to test the product before buying it online. Brands will therefore pay to lease shops in order to be exposed to consumers. Collecting data on footfall or experience indicators rather than sales might therefore be a more effective way to measure the achievements of a shop

Measuring the success of offices is also changing, a successful building in this case means one that encourages productivity in its tenants, by making employees happy and comfortable at work. Productivity means higher revenues and efficiency which therefore results in investors being willing to invest more into buildings which encourage this. To evaluate the efficiency of users within a building, it is thus important for a Property Manager to work with the tenant to develop a kind of scoring grid, by being transparent within this relationship, values and expectations can be communicated and client’s objectives become attainable.

Csongor Csukás points out that, “We need to be more aligned and transparent in terms of remuneration methods, these are very important within the market now. You have to show exactly what you are offering the client. The focus is therefore value reengineering, which means creating revenue by adding value as a result of making your tenants more productive.”

A Property Manager therefore needs to form effective relationships with tenants in order to understand exactly what it is they look for in a building and how success in a specific sector or building can be measured. By combining the use of metrics with a strong client relationship, you are able to be more user-centric. As Csongor Csukás explained, “We at BNP Paribas Real Estate Property Management are positioning our services to align with client’s needs and technology in Property Management, this enables us to be much more transparent in the remuneration of our services. It is all about the growing importance of the individuals, whether it is an employee in an office or a consumer of a retail scheme”

With technology being a key driving force in shaping user’s needs, at BNP Paribas Real Estate Property Management we work to ensure that we fully understand how we can best use new tools to better meet our client’s expectations. As Csongor Csukás explained, “For the 80% of work that will be automatic in the future, we really need to understand how it will work and integrate ourselves into this new way of working, by employing data scientists, data engineers and data analysts . It is therefore going to be vital to extract data from buildings, pushing us to be more user-centric and data driven.”

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