To Keep Investment Deals Moving, The Industry Needs To Get Digital
On the surface, real estate investment volumes in 2021 make for positive reading. In the first half of the year, total UK investment totalled £25.7B, according to Savills, 15% above H1 2020 and 10% above H1 2019 — which is perhaps surprising given the impact of the coronavirus pandemic.
Drill into those figures further and more positive figures emerge. In June 2021, £2.8B was invested in the office sector, which is the largest monthly volume since December 2019. Investment in the industrial sector for H1 2021 reached £7.4B, which already exceeds the annual average of £6.7B.
But what chaos and confusion lie behind these positive figures? While investment volumes are on the rise, investors and property owners could be operating in much clearer water if they embrace digital solutions, Yardi Regional Director Fay Chester said.
“Today, investment management is very inefficient,” she said. “A lot of people are stuck using Excel spreadsheets and PDFs, generating multiple copies and huge email chains — there’s no single source of truth. Other industries have moved on a lot more quickly. The commercial property investment sector can be far more streamlined.”
Yardi Investment Manager aims to address these productivity and automation issues. The platform is a portal that holds information about an asset, allowing for direct communication between property owners and investors. As well as tracking how an asset is performing, it streamlines investment deals by providing secure access to up-to-date information to current and prospective investors.
When Yardi created the solution, the main goal was to create a single platform that benefits both sides of an investment deal. To property owners, it provides a single place to input information about an asset, with the ability to show selected information to investors.
“Crucially, property owners can control what investors have access to — they won’t automatically be able to view information about the whole portfolio,” Chester said. “It allows property owners to share specific opportunities for investment for that particular investor, for example.”
To investors, meanwhile, this single source of information can considerably simplify the process of monitoring asset and portfolio performance, Chester said.
“Investment Manager can create reports directly, instantly,” she said. “An investor doesn’t need to pick up the phone to get a high-level, up-to-date visual of metrics that show how an asset is performing. It cuts out a lot of time and resources. All this will help with decision-making about future investments.”
It also helps with continuity and reducing human error. In the traditional system, if the person who knows the property owner’s details or how to manage distributions leaves their role, the firm has lost strategic business data. Similarly, passing files between teams or people can introduce mistakes.
“Everyone in real estate accounting and finance is comfortable with Excel, and it has a known learning curve,” Chester said. “It is also at risk for human error as multiple versions of the same spreadsheet are shared with the same erroneous formula. No one wants to think about these challenges, but having a system reduces risk and improves decision-making.”
Chester said that as Investment Manager has been rolled out, users have particularly appreciated the collaboration capabilities, such as sending direct messages within the platform. This improves communication for all stakeholders while reducing the need to use other platforms, as it can be integrated with Yardi’s other tools automatically.
“Additionally, investor relations teams find their investors are also gaining confidence in digital tools,” she said. “Investors see they’re receiving information and communication through Investment Manager when needed. They aren’t waiting for a follow-up later. This is much easier on both parties.”
Because Investment Manager is used when a property owner has multiple external investors, efficient communication is therefore key. It’s also why Chester is clear that this type of technology is not going to replace the need for people to make investments.
“While Investment Manager allows investors to input their preferences in terms of future opportunities, a property owner would still pick up the phone to discuss an opportunity,” she said. “The solution is aimed to facilitate what is already taking place, to get rid of user error and streamline the process. Property will always be a people industry.”
Many property agencies are making bullish predictions for the full year 2021, as the industry has got back into gear once the pandemic started to lift. For asset owners and investors to keep up with this level of activity, the right technology could make all the difference.
This article was produced in collaboration between Yardi and Studio B. Bisnow news staff was not involved in the production of this content.
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