- Commercial Real Estate
- Building Innovations
- Building Systems
- Intelligent Buildings
Prop-Tech's Definition Expands, Blurring Lines between Intelligent Solutions
As an emerging technology, property technology or prop-tech (also called real estate technology) has been used for IT and platform economics such as online sales in the real estate market. Prop-tech has often focused on reducing paperwork or making transactions quicker and more efficient as a financial technology.
Prop-Tech Is No Longer Limited to Digital Listings
Originally, real estate service providers applied prop-tech to list houses and offices digitally instead of using print media following the dot-com boom. But this business approach is still growing. One example is Dongnae, a startup that digitized the Korean rental and homebuying market and recently raised an additional $4.1 million from global investors in an extended seed series funding.
Commercial real estate’s various business needs have led to the expansion of prop-tech’s original definition. According to commercial real estate service company JLL, the current prop-tech term is relevant to various technologies such as remote transactions, robots, IoT and sensors, energy management, and intelligent buildings. As a result of these technologies, many startups have thrived worldwide. For example, REinvent, based in Asia, offers two prop-tech solutions:
- A Switch booth is a rental working pod, a booth that can be rented as a small personal office.
- SixSense, a software-based solution, uses occupancy and spacing data integrated into the existing intelligent building system.
Clarifying the business goal of technical terms is a necessary step to avoid any confusion. SixSense currently uses intelligent building technology, but aligning prop-tech as its primary terminology would be better because REinvent claims it is Asia's prop-tech innovation studio targeting real estate, not the intelligent building business.
Engaging the Real Estate Market Requires a Clear Business Goal
Generally, the terms smart building technology and intelligent building technology have been used to categorize buildings equipped with electronic sensors and controls and describe intelligent and automated software used to operate buildings efficiently. Building stakeholders have key priorities that help drive the adoption of intelligent building technology. For building operation managers targeting efficient buildings, an intelligent building's primary goal is achieving sufficient ROI. Saving energy and reducing expenses in building maintenance and operation cycles are crucial targets for building management businesses. Hence, the intelligent building term itself is sufficient to convey meaning in this context. Nonetheless, intelligent building systems offer a number of benefits, such as the ability to retain building tenants and increase asset value, drawing increased net income from their properties. In this regard, the intelligent building scope becomes wider and covers real estate businesses helping property owners, not just operation managers. Thus, using prop-tech instead of intelligent building technology is more logical in this case.
As technology advances, new technical terms emerge or expand to address these advances. Prop-tech's definition expanded following the real estate business' digitization and now overlaps with other terms in adjacent businesses such as intelligent or smart buildings. This overlap can create confusion and could be a barrier for adoption of these technologies. To address this potential barrier, defining a clear business case will be the first step before setting up an entry strategy or applying technologies for the real estate management or intelligent building operations markets.