Blurred Lines: 10 Tie-Ups Where The Real Estate And Tech Worlds Are Working Together
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The Urban Land Institute and PwC’s Emerging Trends In Real Estate Global report published in March had a big focus on the disruption the tech sector has unleashed on real estate.
But the report also highlighted the many ways traditional real estate firms and tech companies are combining to drive innovation in the sector.
Here are 10 key instances where the lines have been blurred.
1. Developers embrace Airbnb
In December, Brookfield committed to invest $200M in Niido, a concept created by Airbnb which will see multifamily developments built specifically for use by the short-term rental company. The first scheme, a 300-unit Airbnb-branded block, is being built by developer Newgard in Florida.
2. Big property companies back Fifth Wall
In May, Fifth Wall Ventures raised the largest-ever PropTech fund, gathering $212M of equity. Among the investors that backed the fund were some of the world’s largest property companies including Hines, CBRE, Prologis, Equity Residential, Macerich and Lennar. It has invested in everything from bike shares to pop-up retail platforms to co-working companies.
3. Developers tie up with Uber
In May, British developer Moda Living announced a first-of-its-kind partnership — if tenants agreed to forgo a parking space they would receive £100 a month in Uber credits.
“Our apartments are for rent rather than for sale so we need to consider how our customers will live in cities in the future,” Moda Managing Director Johnny Caddick said. “Embracing future technology is vital from day one and these plans for a partnership with Uber would not only give our customers an affordable ride at the touch of a button — it would also enable us to design better buildings with more space for social interaction.”
4. Driving sustainability with big data
Dutch pension funds APG and PGGM are utilizing and have invested in data analytics firm GeoPhy, which is allowing them to map the carbon dioxide emissions and general sustainability credentials of their portfolios. When making the investment, PGGM said it wanted to reduce the carbon footprint of its portfolio, but previously did not have data for 50% of its assets.
5. Unibail and Westfield go back to the lab
In the past few years shopping centre giants Unibail and Westfield have both set up innovation labs to back startups, and create and test technologies that can be used to help drive performance of their malls. The two are now merging, and Westfield’s San Francisco-based unit, Westfield Labs, is set to be spun off into its own listed company.
6. Platforms helping owners manage assets
Honest Buildings is one of the software and data platforms that has been most successful in attracting investment from big names in real estate. The cloud-based platform allows landlords to track repair projects and service providers across their entire portfolios, and counts among its investors Oxford Properties, Brookfield and Durst Organization.
7. E-commerce giants get into brick-and-mortar
The world’s two largest e-commerce firms, Amazon and Alibaba, have made big moves into the the world of physical retail, both to diversify and also improve their distribution networks. Last year Amazon bought Whole Foods for $13.7B. And Alibaba has spent more than $10B on department store and supermarket chains in China, and installed its technology in more than 100,000 convenience stores to link them to its distribution chain.
8. Concrete collaboration between accelerator and property companies
Technology investor and accelerator Seedcamp formed a collaboration in 2017 with JLL and Starwood Capital to find, invest in and mentor PropTech companies. The collaboration has since been expanded to include co-working company Fora, logistics REIT Segro, retail REIT Hammerson and construction company Skanska, among others, and has made seven investments.
9. Investors back co-working companies
Co-working and flexible office space are fundamentally challenging the traditional model of office ownership and leasing. Rather than sit back and see how this plays out, real estate owners, particularly from private equity, have backed or bought their own companies. Notable investors in the space include Blackstone, Carlyle, Brockton Capital and Gaw Capital.
10. Big tech companies turn developer
Real estate developers are embracing technology, but big tech companies are also getting into development. Google is building an entire smart city district on the waterfront in Toronto, and Facebook is building its own mixed-use campus town.