Some of Asia’s largest economies rely on real estate for up to 20 percent of their GDP, making the sector an attractive target for technology startups and tech-enabled real estate firms.
Despite this push for innovation, however, some of the largest players in Hong Kong, Singapore and mainland China continue to rely on business processes and management practices that have changed little since the popularisation of spreadsheet software in the 1980s.
These traditional players are now facing a growing threat from property technology startups and a host of mainland China-based developers and investors who are proving to be quicker to adopt tech-enabled strategies.
Today, Mingtiandi releases Building Asia’s Digital Future, the first report ever on the adoption of online technology by Asia’s real estate industry, which shows how property industry players in China are leading their counterparts in other regions in leveraging online technology to increase their competitiveness.
Mingtiandi Surveys Asia’s Real Estate Professionals on Tech Practices
The report is based on Mingtiandi’s analysis of the results of a survey of its more than 10,000 subscribers during September of this year, investigating how real estate investors, developers and service providers are turning to online tools and systems to gain or maintain a competitive edge. The survey and report were produced in cooperation with real estate investment and property management software provider Yardi Systems.
The online poll asked these property industry professionals, 38 percent of whom manage over $1 billion in real estate assets, about how they currently manage their company information and how they see their industry compared to their counterparts in the west and in other sectors.
Mainland Players Move Ahead of Singapore and Hong Kong
More than $3 billion in venture capital has been poured into property technology firms in mainland China alone since 2013, according to a recent report by JLL and Tech in Asia, and that investment correlates with more widespread adoption of online technology among mainland-based respondents to the survey.
Market participants in mainland China, where companies are facing challenges of managing diverse portfolios across multiple cities are now more than three times as likely to be using advanced software systems, such as CRM software or ERP systems, to track business performance than their counterparts in Hong Kong or Singapore.
Competition Pushes Innovation
Tech-enabled co-working providers are pushing office developers to innovate (Image courtesy of naked Hub)
In addition to the investment influx, the rapid growth and competitive nature of mainland China’s real estate industry may also be a factor in boosting tech innovation, with players from the most competitive sectors showing the highest rate of tech system adoption.
In retail real estate, which is facing fierce competition from ecommerce, only a minority of respondents – 26 percent – were still relying on spreadsheets as their primary tools for information management and reporting, while the logistics real estate sector reported similar results.
In the office sector, some of the region’s largest developers, including Singapore’s City Developments Ltd and CapitaLand are reacting to the emergence of tech-enabled co-working startups by investing in flexible office providers such as Distrii and the Great Room. Mainland developer SOHO China, has gone a step further by establishing its own co-working division, SOHO 3Q.
Mingtiandi to Track Tech Adoption in 2018 and Beyond
The results of Building Asia’s Digital Future, show how many of Asia’s real estate firms are still struggling to adapt to technological change which is rapidly spreading across the region – a trend which Mingtiandi will continue to track in 2018 and beyond.
As the only real estate information provider tracking investment and development across the region, Mingtiandi will be building on the foundation of the survey and report to produce quarterly updates on Asia’s co-working sector in 2018.
Also during the coming year, the Mingtiandi team will be creating a larger and more comprehensive survey of technological advancement and innovation in Asia’s real estate industry, with plans to release the next report in the fourth quarter of 2018.
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