A new proptech wave is building up in Singapore – recently named the world’s third most innovative city in JLL’s Innovation Geographies study.
Driving this is the Singapore government’s Smart Nation initiative that was kicked off in 2014, laying the formative ecosystem for a thriving digital economy. The Built Environment Industry Transformation Maps launched in 2017 and 2018 to provide future-readiness roadmaps for the real estate and construction industries were catalysts for proptech development and adoptions.
The upcoming Punggol Digital District will incorporate Open Digital Platform, helping to push the proptech boundary further. By integrating smart city solutions such as facilities, building and estate management systems, the platform will not only centralize the management of all the district’s operations, but also provide relevant data for the development of innovative digital and urban solutions for the district. Additionally, through a digital replica, the district will act as a test-bed for proptech innovations.
Real estate companies are also playing an active role in developing the local proptech scene. For example, JLL and Lendlease, two leading international real estate companies, have jointly launched the Singapore-based Propell Asia proptech accelerator program to help startups access the real estate value chain. Five startups from a range of categories were selected to work with industry players to implement their products and solutions.
Property developers have also jumped on the bandwagon with Capitaland setting up a SGD 110 million startup fund focusing on real estate technology and customer solutions. Meanwhile, City Developments Limited is collaborating with Chinese co-working operator Distrii to develop smart building apps aimed at benefiting tenants and residential home buyers.
Three local banks in Singapore have also launched their own proptech initiatives. DBS Bank has launched DBS Property Marketplace which provides property listings from Edgeprop, Averspace and SoReal while providing home buyers with digital features such as projecting the impact on monthly cash flow that a property purchase would bring.
OCBC Bank has launched the OCBC OneAdvisor platform, which allows buyers to do home searches based on affordability criteria with the listings coming from EdgeProp, 99.co and SoReal. UOB has collaborated with four property agencies – ERA Realty, Huttons Asia, OrangeTee & Tie and PropNex Realty and a proptech company, SoReal Prop to launch a range of digital tools such as a property valuation tool and an online instant home loan approval service.
These collaborations allow incumbents to gain access to innovative approaches and solutions while startups and tech firms obtain access to capital and an avenue to implement their solutions across a wide network of properties owned or managed by the incumbents, or gain access to a large retail banking customer base.
New proptech wave will not be an exception
Singapore is already an innovation hub with significant startup presence. Multinational corporations are also increasingly stationing their innovation labs here. With such a vibrant environment that has seen fintechs flourished, proptech is likely to be no exception. Given the numerous collaborations and initiatives in place, as well as the well-established real estate market providing the testbed for innovations, Singapore is a melting pot for proptechs.
Why is new proptech wave coming?
Despite the pressures created by COVID-19, Asia Pacific continues to be an important and vibrant real estate hub. In fact, there is over USD $40 billion in capital waiting to be deployed into real estate in the region, according to JLL research. Recent industry data also suggests that Asia Pacific will rebound quicker than other global regions.
Equally encouraging; a recent JLL survey reveals that 82% of investors in Hong Kong were committed to investing the same amount or more in 2020 than in the previous year. If we look to Singapore, this percentage increases to 96%.
But despite the optimism of the sector, the situation for investors as they prepare deals can be challenging. Until now, this group has lacked immediate and up-to-date insights into commercial properties, meaning that they have been reliant on time-consuming and often only partially-accurate methods of information gathering – from physical visits to properties, to pouring over complex data-filled reports and spreadsheets. In short, they lack real-time, actionable insights into commercial real estate.
This problem is not limited to investors. Corporate occupiers and CRE brokers face similar challenges when brokering deals. Due to a lack of data transparency, they may not always be able to make the most advantageous leasing decisions for their business, or for their clients.
How the new proptech wave will be different?
There is a consensus that the commercial real estate industry needs to change. And fast. It is our long-held belief that technology holds the key to this transformation.