TORONTO, Jan. 27 (Korea Bizwire) — Altus Group Limited (“Altus Group”) (TSX: AIF), a leading provider of software, data solutions and independent advisory services to the global commercial real estate (“CRE”) industry, today released its latest annual Altus Group CRE Innovation Report that provides an outlook on technology trends and highlights the current digital transformation impacting the global CRE industry.
According to the report, which is based on a global survey of 400 CRE executives, the industry has reached a tipping point as PropTech adoption hits a critical mass threshold. For the first time in five years since Altus Group began conducting this annual research, a majority of CRE leaders now fully recognize the disruptive impact of PropTech, illustrating the shift to an acknowledgement that many advanced technologies can potentially solve their current challenges.
“CRE continues to rapidly accelerate its digital transformation and despite the growing complexity stemming from the proliferation of data, the industry is clearly shifting from a stage of ‘trial and testing’ to one of practical innovation to solve their current challenges today,” said Bob Courteau, Chief Executive Officer, Altus Group. “At the same time, continued automation and significant PropTech consolidation will both have a major impact and deliver considerable opportunities for the industry.”
Platforms and Automation – Transformational and in Full Force
The report finds that online marketplace platforms are gaining significant traction with 61% of CRE leaders saying they will have a major disruptive impact on the industry. Recent years have seen new platform-based marketplaces connecting a broad network of market participants (such as buyers and sellers, tenants and landlords, lenders and borrowers, and investors and fund managers), and delivering transactional efficiencies as well as the collection and aggregation of data for the benefit of users. Lending platforms have experienced the largest level of adoption to date with 63% of CRE firms having used an online lending marketplace for a recent transaction and 79% planning to increase use in the future.
A significant majority of CRE executives (75%) say automation will eliminate jobs. This was counter-balanced with the view that automation also presents an opportunity to introduce new types of jobs within the industry (71%) and shift jobs towards higher value-add tasks (67%). While CRE leaders recognize both the impact on jobs and the short-term productivity benefits that automation can deliver, a major challenge is to anticipate how it shapes the future of the CRE workforce.
Data Complexity Growing but Making Progress through Increased Executive Oversight
Data usability challenges continue to intensify as a result of fragmented data sources, data duplication and heightened complexity of overall data management. CRE executives report increased challenges in a majority of key areas related to data management when compared to five years ago:
|Impediments to firms collecting or utilizing more data to drive decision-making||2015||2020|
|Issues around the regulatory requirements of collection and management of data||47%||59%|
|Lack of internal expertise/capability||29%||52%|
|Lack of normalized data formats||40%||48%|
|Lack of appetite from the company to invest in the required technology||36%||43%|
|Issues around veracity or accuracy of data||52%||40%|
|Lack of tools to assist with data capture & analysis||44%||37%|
|No impediments to collecting or utilizing more data to drive decision-making||18%||3%|
The industry is heavily relying on data to drive decision-making but is hindered by disparate data requiring greater amounts of time to manage. Conversely, there exists a growing prioritization by CRE firms to address these challenges through dedicated executive ownership and governance related to overall data strategy.
- Almost half (45%) of CRE teams are spending at least 15% to over 25% of their time managing and organizing data (equivalent to two to three months of the year).
- Eight out of 10 CRE firms now have a Chief Data Officer or equivalent senior executive who oversees their organization’s data strategy and data governance. This compares to Altus Group’s 2016 research where 44% of firms surveyed indicated a lack of executive sponsorship.
PropTech Consolidation is Coming
While the PropTech landscape has exploded with a huge proliferation of new, enhanced and competing technologies, CRE executives now believe the timeframe for these technologies to start gaining traction and deliver results starts now, with PropTech consolidation a necessary outcome.
- 89% of CRE executives said significant consolidation is needed for PropTech to more effectively deliver on the needs of the CRE industry, with 43% saying it is already underway or will occur within 12 months.
- Areas of PropTech most likely to experience consolidation include property management, property transactions and listing services, and financing and lending firms.
Other notable findings from this year’s Altus Group CRE Innovation Report include:
- A large majority of CRE executives (87%) believe global data standards for commercial real estate will eventually be adopted, however, numerous obstacles were identified including a lack of standardized data definitions on a global scale, and privacy and data protection regulations.
- 50% of executives believe 5G wireless technology will create major disruptive impact on the CRE industry with 81% saying it will support increased adoption and use related to smart city development.
The 2020 Altus Group CRE Innovation Report is based on a global quantitative survey of 400 CRE C-level and senior executives in both front and back office positions at owner operator and investor firms in North America, Europe, Asia-Pacific and Latin America. All firms represented in the survey had a minimum of assets under management of at least US $250 million at the time of being surveyed, representing an approximate total AUM of over US $2 trillion. The survey research, used to form the basis of the report, was conducted by leading international research firm IDC in late fall 2019. A copy of the full report can be downloaded at https://www.altusgroup.com/argus/resources/insights/cre-innovation-report-2020/.
About Altus Group Limited
Altus Group Limited is a leading provider of software, data solutions and independent advisory services to the global commercial real estate industry. Our businesses, Altus Analytics and Altus Expert Services, reflect decades of experience, a range of expertise, and technology-enabled capabilities. Our solutions empower clients to analyze, gain insight and recognize value on their real estate investments. Headquartered in Canada, we have approximately 2,500 employees around the world, with operations in North America, Europe and Asia Pacific. Our clients include some of the world’s largest commercial real estate industry participants. Altus Group pays a quarterly dividend of $0.15 per share and our shares are traded on the TSX under the symbol AIF.
For more information on Altus Group, please visit: www.altusgroup.com.
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Altus Group Limited
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Source: Altus Group Limited via GLOBE NEWSWIRE