Canadian real estate companies have been slow to embrace property technology, or proptech, putting them at risk of losing market share or falling behind their global peers, says a new KPMG in Canada report. It says only 36 per cent of companies surveyed have a digital strategy, compared to 58 per cent globally.
“All industries are experiencing some form of disruption; Canada’s real estate industry is no exception,” says Lorne Burns, partner and national industry leader for KPMG’s Building, Construction and Real Estate group. “Historically, it’s been a conservative industry, but companies can no longer afford a wait-and-see approach. If you’re not already embracing digital technology and leveraging data, you run the risk of either losing market share or experiencing revenue income erosion or both.”
Technology – from blockchain, green tech, the Internet of Things, deep data, artificial intelligence and augmented reality applications – is disrupting and improving how real estate companies buy, rent, sell, design, construct and manage residential and commercial property.
“There are several ways to try out proptech solutions, whether on a large or a small scale,” says Burns. “You won’t be successful with everything you try, but that’s what innovation is all about. Like any significant change, it will feel uncomfortable.”
The report says that all of the real estate companies surveyed in Canada have appointed a digital leader to oversee their technology efforts, which demonstrates that they understand the importance of a digital approach. However, only 28 per cent come from a technology background, comparatively similar to 30 per cent globally.
In terms of cyber preparedness, while 70 per cent say they feel prepared for a potential cyberattack, only 39 per cent have formally tested how they would handle one.
The report highlights a number of bold steps Canadian real estate companies can take to embrace the technological revolution, including:
- Hiring leaders with digital/technology backgrounds to lead the transformation, rather than appointing real estate leaders from within
- Embedding data and analytics into how they run their business
- Building a company-wide digital strategy
- Partnering with proptech companies to co-create solutions
- Looking beyond streamlining operations and cutting costs to find ways to use technology to improve engagement with tenants, customers and customers’ tenants
- Assessing their cyber security readiness to ensure their data is well protected
“Canadian real estate companies are awakening to the digital era, albeit a bit slowly. Now’s the time for them to really dive in,” says Saqib Jawed, partner and the proptech lead for KPMG’s Building, Construction and Real Estate group. “This will look different for every company… large companies with deeper pockets will explore technology in different ways than smaller companies will. But, the only way to find what works for your business is to get started.”