In association with 

We hosted our first roundtable of the year “Data for Real Estate Investing” in association with PGIM Real Estate.  Imran Nasir, Head of Systems- Europe at PGIM co-chaired the discussion with Sammy Pahal, MD at UKPA.

Introduction:

The real estate industry is presented with a particular challenge in an open, digital market – much of its data is held privately for commercial advantage and often inaccessible, unlike other types of investment where there may be a legal requirement for data to be transparent. One of the greatest challenges, which is holding back digital transformation and innovation in real estate, is opening proprietary data and managing the data internally. Often data is an organisation’s biggest asset and is the key to unlocking value and improving decision making.

The aim of the roundtable was to bring together Investors in commercial and residential real estate, PropTech companies building solutions to support decision making and unlock insights from data, and data experts, to address the What, Why & How?

We were joined by members and companies within the property and real estate investment space such as GPE, Recognyte, Re-leased, Coyote Software, Kettel Homes, Plentific, Emapsite, Amro Partners, British Land, Patrizia, LaSalle Investment Management, Vennre and Savills.

How has the increased availability of real estate data influenced decision making and to what extent do real estate investors influence the data being captured?

There was a consensus amongst the group that although the data availability has increased, the quality of the data has not. It is still difficult to aggregate the data hence reporting insights on the same which limits the insights you can gather. As more real estate investors strive to make eco-friendly investments, non-financial data becomes essential to decision making. Some of the participants shared how investors are now asking investment managers for ESG data – much of which is not yet being captured by the property managers. As the factors influencing decision making for investors evolve over time, the analysis of data across the value chain from different stakeholders such as investors and property managers become essential. Over the years technology has been used to capture a high volume and breadth of building data related to the operations. Now, investors are also asking for data on the materials used in the development of the building.

Why should data be central to decision making for real estate investors and What are the pain points with getting access to or interrogating this data?

It was clear from the discussion that in order to keep up with constantly changing market conditions, drivers and customer/stakeholder needs, quality data is essential and the key to digital transformation. Pressure from tenants and ESG legislation are some of the common factors that are now putting data at the centre of the decision-making process for real estate investors

A consensus amongst the participants was that data analytics across the portfolio is challenging as there isn’t just one single source or a centralised database to access with the data shared in a common format. For example, property managers will provide the same type of data in different ways. The participants debated whether there should be a common data standard to adopt or whether organisations have a responsibility to create their own consistent format internally and enforce stakeholders to feed the data to them in the format they request.

The group also agreed that the different ways in which data is interrogated internally created different results and interpretations – creating an inconsistent view amongst the business of the assets. Accessing data and utilising it in the right way requires communication between the C suite and teams responsible for capturing and reporting on the data. It also requires a behavioural shift as teams need to agree to being more transparent. An issue was raised that excel is still commonly used as people want to be able to manipulate/change the data based on different factors.

The group agreed that cost of integrating systems is high, making adoption of new solutions difficult for organisations. Companies within the industry have systems or software in place that is a core part of their functioning and is not always compatible with newer solutions in the market. The group also debated on whether the responsibility of education about PropTech solutions lies with the PropTech companies, or whether property companies need to be more proactive

What role will technology play in the future when accessing such data? And as we move forward to what extent is human intervention still required?

Majority of the real estate data currently available comes from static reports by industry bodies or reports generated from PropTech solutions but at the time the reports are published and accessed, the data may become outdated. Therefore, as PropTech solutions and technology evolves, the trend will move from reports to live data

There was a suggestion that in order for property companies to truly transform, they should focus on building a technology stack rather than procuring PropTech solutions in isolation. By taking this approach, the data will more easily be able to flow between systems and property companies will be able to more effectively utilise PropTech solutions. The data that influences decision making has/is changing and access to such data could also be made easier through concepts/solutions such as a “Building Passport

It was agreed that with advancements in technology such as AI which is helping to mitigate errors and reduce manually tasks, there is a potential for a lower level or huma intervention when it comes to property professionals and specifically the analysis of investment opportunities in the context of this discussion. However, the challenges discussed need to be resolved first, and there needs to be greater trust in the data and improved quality of data. In addition, a shift in behaviour is required which is much harder to do. Humans are creatures of habits, and we see this commonly amongst companies and individuals still using Excel to store, analyse and report on data despite the availability of new intuitive systems and  PropTech solutions, hence human intervention will still be prominent at a certain level.

Summary:

The group covered a range of different topics throughout the discussion. However, there were some common themes that came up throughout:

• The factors influencing decision-making has changed over time with more focus on ESG and pressure on data reporting including from tenants who are asking for more data e.g; EPC and what’s in place to improve it?
• The common challenges that were raised were, the inconsistent way in which data is provided by different stakeholders, and the inconsistent way in which data is interrogated. It is important for organisations to create their own data standard rather than relying on an industry wide standard which is tricky to enforce.
• As companies introduce innovation leads/teams, communication between these teams and senior management needs to be more aligned for decision making to be smoother and for more effective adoption of the technology to happen
• As AI and technology become more prominent within the industry, and some of these blockers are “unblocked” human intervention is likely to be lower, delegates shared they still see a level of involvement within areas that are customer facing.