New innovation model to drive collaboration in uncollaborative real estate sector

New innovation model to drive collaboration in uncollaborative real estate sector

real estate

Innovation in the built environment sector cannot be realised based on a thrust from a single party alone. The built environment sector has traditionally been thought to be large, slow-moving and conservative, and has lagged other sectors in innovation and digitalisation.

This push towards digitalisation must occur at a whole-of-sector level, with cooperation within and across different parties at the corporate, emerging company, and governmental levels.

Awareness of the lack of digitalisation

Countless studies by organisations such as the OECDand management consulting firm McKinsey & Co have rated the real estate and construction sectors as amongst the least digitised. 

A 2020 Statista survey of global real estate C-suite executives found that approximately 33 per cent of respondents shared that their companies did not have the resources and skills required to operate a digitally transformed business.

Thus, these executives realised the ability to generate huge benefits through embracing the technologies which have disrupted the siloed industry.

The importance of integrating technology into the real estate sector

Innovations can deliver strong returns on investment and capital expenditure costs can be spread across asset life cycles.

Smart technologies can also help boost top lines– the European Commission found that a smart, higher-performing building can add up to 11.8 per cent in lease value and fetch increased valuations of up to 35 per cent.

However, sector-wide digitalisation cannot be achieved by corporates alone and must be undertaken at an ecosystem level.

Real estate sector in Singapore

In Singapore, the government has been leading the digitisation charter for the real estate sector, but there is a gap in the model for ecosystem-wide collaboration due to legacy mindset issues in the private sector.

In a recent survey on technology and innovation conducted by the Urban Land Institute and Taronga Ventures, it was found that internal challenges were the largest barriers to the adoption of innovative technologies.

Specifically, resistance to change, business-as-usual conflicts and lack of budgets were listed as amongst the largest challenges facing real estate corporations as they undertook their innovation journeys.

To overcome the former two issues, corporates should work closely with emerging technology companies to design optimal change management strategies to seek buy-in from executives.

Collaborating closely with governments by leveraging digitalisation programs, knowledge sharing, and grants can help alleviate some of the budgetary issues faced by corporations.

Hence, adopting a collaborative tripartite can help drive innovation across the sector.

Also read: Why Singapore becoming a tech hub is a great boost for the proptech sector

Introduction to RealTechX Singapore

An example of a model is RealTechX Singapore, an innovation program that promotes shared support for real estate technologies and knowledge sharing between corporates, emerging technology companies, and government agencies.

Corporate partners in the program include PGIM Real Estate, Mitsubishi Corporation, Nomura Real Estate, CapitaLand, Verizon, and Lendlease’s International Towers.

Together with government partner Enterprise Singapore, the innovation program seeks to support emerging real estate and real asset (RealTech) companies in the sector by accelerating commercial opportunities with corporate partners.

The revolutionary innovations offered by program participants are at the forefront of the RealTech space and span the real estate life cycle, from digital construction management to smart building and smart city solutions.

Other innovations launched digitally

In the digital construction management space, Singaporean companies like Hubble, VRcollab and Voox are leveraging cutting edge technologies to improve collaboration, governance, and safety in construction sites, delivering better quality outcomes with higher productivity.

Further down the life cycle, intelligent solutions such as SmartClean provide IoT sensor-based and data-backed facilities management, while TransferFi is revolutionising the sensor space with its wireless power network technology that abolishes the need for cabling or batteries.

Finally, solutions are also providing corporates with key ESG outcomes– Hydroleap has significantly shifted the water treatment space using its electrochemical technology that is not only cheaper but also greener.

Its technology can be applied to multiple use-cases, including wastewater treatment from construction worksites, or in the treatment of water used in data centre cooling towers.

Corporates have the opportunity to readily test and scale these solutions as they drive innovation in their portfolios and assets.

Along with the strong support RealTech companies and corporates receive from Enterprise Singapore (ESG), this new tripartite model has proven an efficient and successful method of driving innovation in the sector.

Also Read: Tech scouting and innovation partnerships: How co-creation can foster growth post-COVID-19

Establishing and building a network

The agency has been at the forefront of supporting the industry since its inception – in addition to providing support for emerging companies through financial and non-financial assistance, it looks to create network-building opportunities through events like the Singapore Week of Innovation and Technology (SWITCH) which was held from 8-12 November 2021.

SWITCH brought together thought leaders, entrepreneurs, and investors to catalyse collaboration that will bring a meaningful exchange across different fields and markets.

Partnerships with investors, strategic partners, public sector agencies, and emerging technology companies must be formed to drive this change.

The traditionally competitive and uncollaborative built environment sector must work together to overcome a lack of innovation capability and knowledge gaps.

It is extremely encouraging to see that these groups are recognising the benefits of partnerships and are embracing this new model of collaboration.

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Image credit: andrewblue

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