Just 35 percent of Asia property professionals see the region trailing the West in adopting real estate technology, according to a survey conducted by Mingtiandi, compared with 56 percent who felt that way three years ago.
The change in use of new systems in the region is documented in Tech Adoption in Asian Real Estate: The Pandemic Drives Innovation, a report set to be released next week, at the first session of Mingtiandi’s proptech forum.
If Asia was a laggard before in terms of proptech adoption, that’s simply no longer the case, says Jonathan Hannam, co-founder and managing partner of Taronga Ventures, which invests in tech companies involved in real estate.
“Asia is urbanising at a much faster rate than the rest of the world, we have a much higher level of construction across all of our markets, which means there’s new development, and new developments all have a greater focus on innovation,” Hannam said.
Hope and Scepticism
The perception among Mingtiandi’s respondents is that Asia has begun to close the gap between the West’s proptech efforts and its own. Nonetheless, scepticism persists over how fully the real estate industry has embraced technology as an agent of change.
In a clear shift from a similar survey conducted in 2017, respondents this time declared that Asia’s real estate industry was catching up with the West in terms of adopting real estate tech. In fact, 30 percent said Asia was leading the way globally, up from a mere 12 percent three years ago.
And while 35 percent said Asia was still trailing the West, that figure was down from 56 percent in the previous survey. A further 28 percent of respondents saw no appreciable difference between the two regions, roughly the same portion as in 2017 (26 percent).
Broken down by industry, fund managers and financiers were the likeliest (38 percent) to see Asia as trailing the West in proptech adoption, followed by property consultants (34 percent) and developers (28 percent).
In terms of seniority, C-suite respondents were the likeliest (47 percent) to regard Asia as trailing the West, while those in director-level posts were the likeliest (33 percent) to see Asia leading the way.
Location seemed to shape respondents’ perceptions more than any other factor. Just 6 percent of mainland China respondents saw Asia trailing the West, compared to 35 percent in Singapore, and 43 percent in Hong Kong.
Those in Singapore were the most likely (30 percent) to see Asia leading the way, while roughly a quarter of mainland China and Hong Kong respondents held that view.
China-based executives are less likely to see the West as leading the way because they see the on-the-ground tech reality in China, says Bernie Devine, regional director of property software and intelligence provider Yardi, which sponsored the report.
“Mainland tech companies have moved beyond a model of copying others’ technology into a real recognition that Chinese business is unique and locally designed systems can help them reach their goals,” Devine said.
Tradition and the generation gap also determine attitudes. Kim Kan, director of global real estate and construction at KPMG China, says the nature of the Hong Kong market is such that many established players initially look at tech advancement with apprehension.
“For the majority of big family real estate owners in Hong Kong, it’s an older generation running [the companies],” Kan said. “We’re starting to see a shift in their attitudes towards technology now, but it goes back to, historically, not feeling a need to hurry tech along.”
Real Estate Versus Other Industries
Opinion about tech adoption in real estate relative to other industries was remarkably stable in the latest survey compared with the 2017 edition. Just 7 percent of respondents felt that the real estate industry was leading the way in technology, while 77 percent said real estate trailed other industries. Those figures were essentially unchanged from three years ago.
Kan agrees that the sector has been one of the slower adopters of anything new: “Think about the mindset of an asset owner, as long as it’s fully occupied or it’s in a good area, the asset will generate revenue.”
The survey was sent by email to Mingtiandi’s mailing list of 10,000 subscribers. A total of 180 respondents took part in the survey, which was open from 4 August to 21 August 2020.
Mingtiandi’s Tech Adoption in Asian Real Estate: The Pandemic Drives Innovation is set for publication in January 2021. Watch for the launch of the report here on MIngtiandi, and sign up for Mingtiandi’s proptech forum to see the report’s key findings discussed live.
Tech Adoption in Asian Real Estate: The Pandemic Drives Innovation and Mingtiandi’s proptech forum are both graciously sponsored by Yardi.