Proptech – Future of Real Estate?

10:51:45 AM | 3/6/2019

“Proptech” is one of the most discussed keywords when people talk about the future of real estate. So what is proptech and how much of an impact will it have on Vietnam’s property market?

What is proptech?

Proptech refers to technology aimed at the real estate industry and attempts to change the way we buy, sell, finance and manage property. According to Oxford University Business School, 2017 marked a watershed moment in the proptech sector. "Proptech has been building such mass and momentum that it will change the world," the school claims in the recent report, PropTech 3.0: the future of real estate.

According to the report, there are three sub-sectors (verticals) of proptech globally: Real Estate Fintech – facilitates the trading of real estate ownership;
The Shared Economy – facilitates the use of real estate assets; and Smart Real Estate – facilitates the operation and management of real estate assets.


Proptech around the globe

According to a Savills Impacts report, at the end of 2017, the value of the world’s real estate reached US$280.6 trillion, of which approximately 78% is residential property. To give this figure context, global GDP is US$78.3 trillion, accounting for 30% of global real estate.

Global real estate in comparison

A Global Real Estate Tech/PropTech Investment Report for 1H2018 from YoStartups revealed that from 2005 to 1H2018 the total amount of investments in PropTech start-ups accumulated to approximately US$70 billion, with 54% occurring in the last 2.5 years. According to a local report by KPMG and Taronga Group's investment arm Real Tech Ventures, investment into proptech companies will reach US$20 billion by 2020.

The report identified urban planning, design and construction, search, sale and acquisition, leasing and management, data analytics and sustainability as the area most likely to rapidly innovate and attract capital investment.

Steven Lang, Director, Commercial Research Savills UK, said “Although proptech has the potential to transform every aspect of the industry, from the process by which buildings are bought and sold to how they are designed, most of the tech innovations that are coming on stream fastest are those focused on managing real estate more efficiently. These include things like apps and sensors that detect how many people are in a building and where, and can turn the lights and heating off accordingly to reduce energy use, as well as giving occupiers data to help them design and manage their space more efficiently.”

Troy Griffiths, Deputy Managing Director, Savills Vietnam, agreed: “Much of the Proptech space so far hasn’t been in the start-up space by definition, but is simply an extension of efficiencies to existing operations. Think about IOT and big data, rather than disrupting are simply advancing current practices far more effectively. AI and Blockchain are similar parallels, slightly diverging current practices but not disrupting. The sharing environments ‘disruptors’ such as Airbnb through great tech and Workthere on a wholesale position, allow far more flexible solutions that cater to contemporary needs. With relatively low margins, high resourcing needs and large asset values, then Property Management is a service line that can immediately benefit from increased efficiencies.”

Proptech in Vietnam

Vietnam is no exception from the global proptech trend. With 64 million internet users, accounting for 66% of the national population, Vietnam has quickly adopted smart technology and promptly caught up with the rest of the world. Smart technology is applied to various aspects of the property market, from mobile apps for sales purpose to integrating smart technology to developments in both public areas and privately occupier spaces (apartment/retail); even property managers are gradually employing smart technology for effective project management & operation.

At the forefront of this megatrend, Savills Vietnam has dedicated an experienced team to developing Savills Property Management Solutions (SPMS) – an official and direct communication channel between developer, residents and tenants. The mobile application offers an immediate and personalized response to requests and demands via an automated system. Providing a clear passage of communication between residents and property managers, SPMS also enables residents to process bills and book building amenities with a few simple clicks.

 

SPMS is a user-friendly, management information system available via mobile application and a centralized website. SPMS will provide residents and the management team/board with numerous features including:

For Residents:
- Work Order
- Visitor Registrations 
- Online forms application
- Amenities’ Booking
- Events calendar
- Online payments (deposits and invoices)
- Library

For Management team/Board of Committee/Developer:
- Resident and Unit Profiles
- Work Orders (to staff)
- Fee Notifications
- Staff Management
- Resident’s feedback management
- Online reports
- Partners Information
- Communication

Tran Minh Ai, Director of Property management, Savills HCMC, shared: “Savills Vietnam’s large and expanding management portfolio required additional time and resources to provide effective management practice. With that in mind, we developed SPMS to provide property developer, manager, residents and tenants with a direct, clear and transparent communication channel. SPMS stores historical data from all projects, of which technical requests and feedbacks from residents could help property developer and manager improve project management and operation over time.”

Launched in March 2019, SPMS has been integrated into projects managed by Savills Vietnam in Ho Chi Minh City, Hanoi and Danang. The application will be updated regularly with new features to make all operational process more convenient and streamlined.

H.Ly