By Jatin Ondhia, Co-Founder and CEO, Shojin
Throughout the 21st Century, almost every industry has given birth to a
new sub-sector – its digital offspring. Financial services has fintech;
property has proptech; healthcare has healthtech; insurance has
insurtech; and so on.
This rise of the new tech-suffixed portmanteaus reflects how new digital
innovations have disrupted the status quo across virtually every
industry. But some have been more impactful than others.
Fintech, for example, has been truly transformational in changing how
consumers and businesses access financial services. The proptech
revolution has not quite hit the same heights.
Technology has undoubtedly played an ever-greater role in the way real
estate is planned, financed, built, bought and sold over recent decades,
and this will certainly continue. Indeed, the global proptech market was
valued at $31 billion in 2022, with this figure expected to more than
quadruple by 2032, rising to $133 billion.
But there is scope for a great deal more progress still to come. More
specifically, tech holds the key to unlocking greater investment into
property, sparking new collaborations, and creating a faster and more
transparent industry as a whole.
Climbing the slope of enlightenment
The analyst firm Gartner has coined the phrase Hype Cycle; a journey
that emerging technologies typically go through. It consists of four
phases:
1. Trigger – new technologies (or a new tech trend) burst onto the
scheme and the creators strive for proof of concept and product market
fit.
2. Hype – buzz builds around the new tech and the impact it could have.
3. Disillusionment – the tech, still in a relatively immature state,
fails to live up to the hype, and a period of disillusionment follows.
4. Productivity – the tech develops, use cases emerge, and the market
matures with a better understanding of how the tech works and what it
can achieve.
Proptech is somewhere between the third and fourth phases of this
journey. Why has it struggled to reach what Gartner would call the
‘plateau of productivity’?
In reality, the challenge lies in just how vast the real estate industry
is. It spans everything from planning and development through to sales
and leasing, with further fields relating to the management and
maintenance of buildings. Then there is the financing behind it – a huge
beast determining how properties are built and how people can afford to
buy them.
To date, tech solutions in the property industry have predominantly been
created in isolation – single pieces of hardware or software that are
launched to solve specific problems. This is not uncommon; similar
trends could be observed in the fintech industry, where startups create
products with a narrow focus, aiming to do one thing well.
But such an approach is problematic. It limits the impact any single
business or tech solution can have, when the true value of technology
comes through compatibility, allowing it to be harnessed in a cohesive
and strategic way.
Consider fintech. Open banking has played a huge role in improving the
value of fintech solutions – it enables a consumer to use one app to
manage their money across various banks and providers. No one wants to
use dozens of disparate solutions – a streamlined experience is
important, and means of enabling cross-pollination between different
technologies and customers should therefore be welcomed.
Taking a collaborative approach
For me, for technology to have the greatest possible impact on the
property industry, we must break down barriers between businesses and
their tech. Greater collaboration will unlock exciting new
opportunities.
At Shojin, we have seen this first-hand. As a tech platform that enables
fractional investment into real estate development projects, we have our
own growing collection of investors. But we also recognise that there
are other investment platforms in other corners of the globe whose
clients have a strong appetite for alternative investments, especially
opportunities that are property-related and UK-based.
For instance, we work with Alta, Asia’s leading digital securities
exchange for alternative assets, LINUS Digital Finance, a German real
estate investment platform, and Reinvest24, an Estonian real estate
crowdfunding platform. A paradigm shift has been necessary to build
these partnerships. But opening up the hitherto exclusive investment
opportunities available on our platform so they are also made available
to partners’ investors has been an important step. The end result is
more people and businesses using proptech (and fintech) solutions and,
more importantly, more investment available for UK property developers.
Amidst the drive to build a loyal client-base, collaboration with other
businesses that could be seen as competitors has naturally been hard to
come by. But a siloed, fragmented approach will prevent proptech and
fintech from fulfilling its potential; instead, by embracing
collaboration, we can usher in a new and exciting era of innovation,
which will maximise the impact that tech can have on the property sector
as a whole.
Jatin Ondhia is Co-Founder and CEO of Shojin, an FCA-regulated online
real estate investment platform that lowers the barriers to entry for
individuals across the globe looking to access institutional-grade,
UK-based real estate investment opportunities. He served as Director for
UBS for nine years, using his wealth of knowledge and experience to
provide strategic fixed-income solutions to the bank’s top clients and
expand the UBS Delta businesses in the intermediary space. Jatin also
has over 20 years of property investment experience.
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