Real estate, alternative real assets and other diversions

PropTech in Block Management The impact of technology on property management

Technology

Surveying is not an industry generally renowned for perching on the cutting edge of technology. You would be hard pressed to find many established businesses in this sphere at the forefront of the digital revolution, although the principle of constant adaption and evolution to ensure survival rings true for all companies.

Most industries with an -agent suffix, whether travel, insurance or estate agent, have been exposed in recent years to the impact of web-based services. The clear shift online has been to the detriment of direct personal contact with the agent concerned, and whilst the rumoured demise of traditional estate agency for example may still be a way off, snappy advertising and cost-effective offerings from online rivals have certainly made a dent. The current c.7% share of the estate agency market by online providers may still seem small, but the growth in year-on-year terms has led some analysts to suggest that this could rise to c.25% of the market within five years.

PropTech (Property Technology) is the current watchword in the industry. This is defined by a leading proponent of the sector as ‘the name given to technological innovations that are developed for and implemented within the property industry’. Although PropTech has principally been considered to date in terms of estate agency, in my capacity as a residential managing agent (yes, that -agent suffix again) there is a recognition that the PropTech revolution will have an inevitable impact on the management surveying market. The questions though are how, why and when, and what we do to embrace it.

As to ‘how’, automation of routine processes is likely to continue to increase, with invoice entry, bank account reconciliation and year end account production the obvious contenders. We would anticipate seeing more prevalent use of apps or online forums to quickly update residents on building matters (the lift is out of order for maintenance for example) which can be quickly administered, and which in turn ensures that staff have more available time to ensure non-routine queries are addressed and client-facing roles supported.

Paper-free processes are more streamlined and cost-efficient, with accounting and administration two obvious areas. Managing agents still comprise a paper-heavy industry, partly as service charge demands, statutory notices and accounts are usually served in hard copy. Moving to platforms which enable leaseholder online access to service charge accounts, client access to view bank balances, building-specific websites which detail local information and repair reporting, should improve communications both in speed and frequency.

There are a small number of packages already on the market providing some of these services in varied forms, but to date there is not a holistic platform which deals with all aspects of residential management without potential detriment to the overall service provided by the reduction of personal service. KPMG issued a report on PropTech in 2017 entitled ‘Bridging the Gap’ which noted that property was increasingly becoming more of a service than a product. This aspect of ‘lifestyle management’ already provided by firms with reward schemes is likely to be expected in a similar form from residential agents.

Changing demographics and rising expectations answer the ‘why’ question. Lack of available development space, particularly in urban centres like London, mean that construction generally goes upwards not sideways, with apartment blocks the obvious choice. Funding schemes such as Help to Buy and an increase in PRS sector investment has led to a younger professional class of occupant of these blocks, with a consequent preference on apps and other technology to deal with reporting repairs, paying bills and general communication online, all of which point towards the need for an intermediary forum to administer these issues.

I can recall many years ago coming into the office on Monday mornings to a sheaf of faxes, the number of which were amplified if it had been raining over the weekend. Now of course a ubiquitous stream of emails at all hours has taken their place, some with measured content, some less so, but all with heightened expectation for an immediate response. All industries now work at a quicker pace than they did some years ago in order to satisfy the needs of the consumer who demands a prompt answer and residential management is no different.

Technology

About Calum Watson

Calum Watson

Calum Watson is Managing Director of D&G Block Management, an established firm of managing agents operating throughout Greater London. He has worked in the London market for 20 years and has a particular interest in maximising the value of assets and services on behalf of clients. D&GBM manage a wide ranging portfolio of over 6,000 units on behalf of freeholders, RMCs and private investor landlords.

Articles by Calum Watson

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