Ambulance Data And Deal Filters: What Big Investors Really Want From Proptech
Of all the different parts of real estate, one of the most fundamental, investment, has been among the least affected by technology.
The PDF brochure emailed by a broker is still the basic unit of currency for how deals are introduced to an investor. In 2022. And many investors are still relying on historic, backward-looking data to inform the way they source deals.
Bisnow’s Technology Driving Profitable Real Estate event, held at Ashby Capital’s Kensington Building in west London, heard from two of Europe’s biggest property investors on how they are using technology to source and analyse deals, and what they are looking for from tech providers.
The Power Of Unstructured Data
“Traditionally real estate relies on a combination of institutional, traditional data and retrospective data,” PGIM Real Estate Executive Director-Global CIO Office Naqash Tahir said. “And that gives us good understanding. But more and more, we have a lot of nontraditional ways, the unstructured data, that can give us a much more granular picture of asset or location, and can give us much more understanding of the opportunities and risks of those assets.”
By unstructured data, Tahir means large pools of data that have not necessarily been sorted and analysed into a coherent picture. It could come from the physical world, such as data gleaned from sensors in a building or a street, or from the internet.
This data can provide the kind of insight to which real estate investors have typically not had access before, providing more information about an asset or location before they decide to make an investment.
Tahir gave plenty of examples, some already used in real estate, some more innovative. Footfall data for a retail scheme or shopping street is one, but building sensors are allowing this data to become a lot more granular. The proliferation of sensors is allowing investors to know how people really move around cities or neighbourhoods.
Taking that one step further, he mentioned seeing software that provided data about where ambulances were travelling most often in a city, which could be used as a proxy for an older population, suggesting demand for senior living.
In the digital world, rather than relying on historical employment data, he said investors could look at job listings to find markets where employment was growing and where there might be office demand. And analysing search data on rented residential portals can allow multifamily developers to see the demand levels for different apartment sizes.
Tahir added that improvements in machine learning and artificial intelligence would make sorting through these large, unstructured datasets more viable.
Spitting Out Deals
Cromwell Property Group's head of research and investment strategy, Tom Duncan, has a wish: a tool that creates a database of buildings the company might want to buy so it can filter out the noise.
“For us, the greatest potential of data is to enable better decision-making,” Duncan said. “On the face of it, you can have two identical buildings, but one really drives performance, and another doesn't. So I think in the future, it's going to be about really getting under the skin of buildings, understanding what their parameters are and what that means for your investment strategy.”
The way Duncan would love to see this manifest is in a database of buildings that can help make investors’ decisions easier and more informed.
The real benefit of a more holistic data platform is the ability to automate the investment strategy process, rather than looking at it on a deal-by-deal basis, he said. If you have a database of assets and it's transparent, you can put in your parameters.
“And in no time at all, it spits out assets, which are perfectly aligned to what you want to see in your investment strategy,” he said. “So at the moment, we do it on an individual asset basis. It's a case of examining the asset with a human. But I think, in time, technology really can automate that process.”
