A critical view on the rise of Tech in Real Estate

Are the property owners or landlords of the world waiting with complacency for the next big thing?

Will they wake up only once users have forced them to offer additional services & adapt to expectations? 

Are millennials truly using buildings differently than prior generations? 

Or does this situation simply originate from tech companies looking for new industries to sell to? 

To be diplomatic, let’s assume that it is a mixture of all of the above. Let’s have a closer look:



Change in Consumer behaviour

The real estate sector undergoes a steady transformation, currently most prominently driven by the digitization, changed user needs and demographic trends. Due to this evolution in working culture and the living circumstances, people expect more flexibility, mobility and simplicity from their colleagues, their employer and their social circle. These expectations not only influence the buildings itself but may affect the bigger picture, such as the way we live and work in them.

This results in new ways of living and working, such as models based on the sharing economy, co-working spaces and shared apartments.

“The ‘human experience’ is becoming the driving force in how workplaces are designed, built and managed. At JLL we are turning our approach to building management inside-out. It’s not how people fit into the buildings we manage; it’s how we manage the buildings to fit the needs of the people inside. The future of work is here and this research is key to our new strategy,” noted Bob Best, the executive vice president at JLL.

A search for efficiencies

Today many facility managers and tenants are looking for innovative ways to make their lives easier and bring efficiency to their real estate spaces. Usually they intend to optimise building conditions, utilisation of workspace and energy usage.

While some believe that this is possible by implementing High-tech solutions such as smart and connected sensors that help property tenants and managers to monitor environmental conditions and improve performance, others believe that „Low-Tech goes before High-Tech“. Philipp Boutellier, CEO of the Tegel Projekt GmbH,  recently started a discussion (DGNB Blog, 2017) by stating that ‘with a better planning of the building, comes a lower need for technology.’





The EDGE OVG Amsterdam: The Digital future of Real Estate

In the same round-table: ‘Too smart: How much technology can buildings and their users handle?”, Sandra Gritti, Product Excellence Director of the Project Developer OVG, stated that for them low-tech always goes before high-tech. Nevertheless, there is a lot of unexplored potential, especially in office buildings, that can be exploited with the right technology. A great example for this is the building that the Dutch Real Estate company constructed in Amsterdam and that has been hailed worldwide smartest and most sustainable building in the world: The Edge.

What makes the Edge so unique? The success is based on the three pillars: Sustainability, Technology and Living & Co-working. All of OVG buildings are “more than merely a combination of materials”. Their sophisticated design, combined with smart and advanced technological solutions embodies the success of IoT and its future in real estate. As Coen van Oostrom, CEO of OVG Real Estate claims, The Edge “demonstrates what the future of real estate development can look like when sustainability and innovation have to be the main focus.”

Going digital  in Real Estate - a necessary transformation?

What is clear is that the interest for property tech solutions is at its highest point until now. The combination of the fear to miss out on the window of opportunity  (could be called “WeWork”-Effect ) consequently putting their competitiveness at risk and the growing demand of the users for comfort and sustainable buildings, can be seen as the biggest drivers of this trend. This is creating a great opportunity for companies to stop and rethink the way they do business.

The evolution of proptech is creating powerful conversations, forcing us to focus on the unique value and competitive advantages we offer. It's pushing us to strengthen our commitment to our partners and real estate advisers so that they can create unforgettable experiences for their clients. - Anthony Hitt, Engel & Völkers Americas

The implementation of technology in buildings opens up a lot of opportunities to redefine the way Real Estate companies operate. Although there are the ones that enjoy trying out all the new technology ‘toys’ and the ones that are mostly skeptical and conservative towards it.

We believe that at the moment users are ‘pulling’ for tech in buildings and that this has derived in Tech companies jumping in. Project developers have perceived this phenomenon and are jumping in when they realize that tech is not just improving the customer’s experience, but it is actually providing them with real Capex and Opex savings. For example when the wired sensor infrastructure can be replaced  by wireless mesh networks, basically replacing ‘the copper of their building by sand’.




At Sensorberg we are highly interested in the digital development of the real estate industry which is currently heading the right path. Certainly, we will keep track of the development and inform you about our findings in our next newsletters.