There can be few occasions when a debate around the importance of adopting technology is more powerful than in the midst of a global crisis that requires unprecedented social distancing.
When EG recorded its podcast on ensuring the real estate sector embraces technology, AI and data just over two weeks ago, three out of four speakers dialled in – two from quarantine zones. Things have moved fast since then and now, with most people working from home and using technology to do their jobs and stay connected to friends and family, our reliance on tech has never been more pronounced. And, as the podcast explored, digital transformation and embracing tech should no longer be just about the trailblazers – in real estate specifically or the wider world more generally. Not least as it has the power to connect, even when we must physically take a step back from society.
“Not interacting with people is really hard,” said Concrete VC venture partner Angelica Donati, who called in from Rome and was, at the time, a few days into Italy’s full lockdown. “It’s moments like this that remind you how important social contact is and also how crucial a role technology can play when we are forced apart.”
Gabrielle McMillan, chief executive of Equiem, also called in from a quarantined area outside New York; Charlie Wade, European MD of VTS, called in but not from quarantine; and Susan Freeman, partner at Mishcon de Reya, joined the debate live in the studio. All three, like Donati, were quick to say that technology would prove to be a crucial factor in allowing business continuity in the event of widespread social distancing in the UK – which we all now know quickly became a reality.
This is possible
Wade pointed out a potential positive outcome which tied neatly into the wider podcast topic around the need to bring the whole real estate sector up to speed on technology, rather than just leave it to a forward-thinking few. He argued that a prolonged period of continued remote working and flexibility would be most effective if it starts to change the mindset of people within the industry who would not be classified as “the trailblazers”.
“There are lots of people in this industry, including all of us on this call, who are very tech-enabled and digitally native,” he said. “But that is not true of the whole industry. So what might happen, if social distancing and remote working is kept up for a sustained length of time, is that it could see those who perhaps haven’t embraced flexibility or working from home change their minds and shift the way they work.
“Maybe we’ll open their eyes and they will think ‘Well, actually, this is possible’. And that could be an industry-wide shift. I know these times are incredibly tough but I’m going to try to look at a positive thing that could come out of it.”
Also keen to find a positive message, Freeman added: “It seems to me that social media and technology is really going to come into its own. Up until now we’ve been using it in conjunction with other face-to-face meetings, but for a while it might be the only way we can actually keep in touch with each other. And obviously technology facilitates more digital events like this.”
“There is so much to be said here about the power of flexibility and connectivity,” added Donati. “If we didn’t have the option to log in and work remotely, we would be in serious trouble right now.”
McMillan put forward another potential positive outcome off the back of such strange times. She said perhaps the current situation we all find ourselves in would encourage people to appreciate that technology is at its best when it is used alongside social interaction.
“Physical human interaction is incredibly important to all of us and in some ways, technology has actually been a factor in in many of us feeling more isolated and less connected over time,” she said. “So my view is that people will be thankful for the technology at this time but will also start to appreciate just how important social interaction is. Office buildings are not going to go away in my opinion. I think this will make people realise how much they need to come together.”
Moving on to discussions around the wider subjects of AI and data, two more specific elements the entire real estate sector needs to embrace rather than just the trailblazers, Wade kicked off the debate.
Data is a particularly sensitive topic in this industry because, historically, real estate companies have considered data their unique selling point to distinguish them from the competition
“I think it is important that people understand, in its simplest terms, artificial intelligence is the tech that we just consider to be smart,” he said. “Machine learning is probably more around the current application of AI. So it’s based around the idea that we should just give the machines data and then the machines should just kind of learn for themselves.
“When it comes to commercial real estate, the common theme in both of those things is the reliance on data. I think before we can talk about AI or machine learning that we need to look at data.”
He added that when it comes to AI in general, the property sector is trying to “walk before we have even learnt to crawl” and that his advice to the industry is to first focus on what it is you’re trying to achieve.
“What are the outcomes that you’re truly driving towards? Go back to basics and define the data or the data sets required that are going to help you achieve that. Then the most important questions you should probably ask before you try to think about AI is ‘Is my data accurate? Is it clean? Is it standardised? Is it in one place? Is it easy to access?’ And if the answer to any of those is no, then I would suggest you probably start there.”
Unpacking data
McMillan agreed that pretty much everything the sector wants to achieve using AI will come down to having the right data strategy and structure.
“There is a huge volume of transactional data,” she said. “There’s a huge volume of leasing data and valuation data. But to use it effectively you must start with a view of what you’re trying to achieve. It might be something like ‘Can I predict whether a tenant is likely to stay or go based on certain behaviours?’ Or ‘What is the what is the link between engagement and renewal? What can I understand and therefore predict about the needs of certain industries or certain tenant?’ These are all things that can be unpacked from data. But it all comes back to that structure. That’s really where most people in real estate need to start from because the data sources are often legacy. This will be a long process for many.”
Then there is the added issue that data is something of a tricky beast to manage – particularly in real estate – as Donati pointed out.
“Data is a particularly sensitive topic in this industry because, historically, real estate companies have considered data their unique selling point to distinguish them from the competition. That means there is less of a willingness to share and because all the all this, data is siloed within these groups, which although very big only takes up a very small part of the share market, regardless of which asset class you’re looking at.
“That in turn means it becomes much harder for tech, which requires a lot of good data, to build that out and make sure the algorithms work. So I think there are two levels of concern in real estate. The first is very specific to real estate, which is ‘my data is my biggest asset and I don’t want to share it’. And then there is the second level of concern, which is more kind of general a general consumer concern, which is ‘what happens to my data when I let go of it. Who’s going to use it?’”
She added that the answer to this problem will be transparency and clear communication between those who receive the data and those who give the data over exactly what’s going to happen with that information.
“AI remains largely unregulated too,” added Freeman. “And the end of February, the European Commission announced that we need some legislation around AI and I think that’s absolutely right and I hope we see a lot more of this approach to dealing with legal and ethical issues head-on down the line.”
From social distancing to data structures and from loneliness to AI legislation, a lot was covered in this EG podcast – all delivered with some much-needed positivity as we navigate these unprecedented and tough times.
Click here to listen to the other sessions that EG recreated in the studio during the postponed MIPIM week.
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