PSD's Technology expert James Collins has recently met with some of the start-ups hoping to revolutionise the Property & Construction industry. It is clear that the sector is brimming with opportunity for digital disruption.

Building ConstructionTechnology is transforming the way we go about living, working, consuming and playing. Yet while all of these activities take place in built environments, the way in which commercial property and construction companies deliver these spaces has remained relatively untouched by the digital revolution. Property has traditionally been very paper-based and seen IT largely as a means of processing and storing accountancy data. This is in stark contrast to other industries such as retail, finance and media where digital transformation has proven crucial to success in the 21st century and where failure to adapt has resulted in businesses shutting shop.

Given the impact that Zoopla and Rightmove made on the residential real estate market in the late 'noughties' it is surprising that technology start-ups targeting commercial property and construction have not emerged and impacted the UK market sooner. B2C companies have been driven to adopt digital strategies faster by the speed of development and adoption of new consumer technologies such as smart phones, tablets and wearables.

A new wave of start-ups have cottoned on to this opportunity and are testing the market with fresh ideas and concepts to digitally revolutionise the industry.

Office R&D is one such start-up. Last year their CEO, Miro Miroslavov, was working in an enormous, bustling office for one of Bulgaria's biggest IT service providers. As a dynamic tech company, people were moving around the office to create new team structures as they were on-boarded to different projects. The problem was that there was no real system for organising the seating arrangements which resulted in under or over utilised space and teams trying to work on top of one another.

Office 1Miro and some fellow developers got together and designed a technology solution that could bring order to the office environment. They decided to go for a SaaS model that could be set up quickly and used straight away, cheaply and with little specialist training. They have now developed several modules within the package to encompass space management, occupancy, relocation and availability and they are working on additional functionality to cover reporting and insights into the financial implications of space management on the overall cost of the office.

The product has had early adoption from 'flexible offices' and highly dynamic working spaces but eventually Miro wants to take on the traditional office market too. The key to this is how they will market a trendy product to the Facilities Manager who is used to and happy with using older, less agile products. Miro says that what they are looking for now is 'smart money' - investors from the sector who can provide the knowledge and contacts on top of the cash to help them expand and crack more conservative areas of the market.

Space management is not the only area of property that start-ups are looking to disrupt. There are even those that are targeting construction, an industry which has traditionally been very slow to adopt new technology but one where processes can be greatly improved.

BaseStone is a construction data capture and communication tool aimed at reducing inefficiencies and errors by completely digitising the construction review process. Its founder and CEO Alex Siljanovski had worked as a Chartered Engineer in the construction industry for nearly ten years and so knows first-hand the problems that occur regularly on construction projects. “A lot of our clients are moving towards a more digital workflow and specifically identifying paper-based processes to digitise. BaseStone completely digitises the review process and streamlines the back-and-forth communication that takes place over drawings.” Basestone

They have had some great initial take-up from the likes of Crossrail and Costain and Alex has big plans for growth. “ From property to infrastructure projects, BaseStone addresses a global problem in the construction industry. The sky really is the limit”

 “The industry must adopt new technologies and ways of working” says Alex. “When you look at future engineers and architects coming through university now, they are so incredibly conversant with the latest forms of technology that they expect this trend to propagate to the industry”

So what does this mean for the large corporate property companies which currently dominate the sector? Having spoken with a number of CIOs and board level executives in the sector on this topic, I have noticed three recurring themes.

Firstly, property companies need more visibility over start-ups and the emergent technologies that are transforming the sector. This means that boards need to work more closely with CIOs to understand the threats and opportunities that start-ups can pose and provide.

Secondly, there are areas where large property corporates have an inherent advantage over start-ups that are not being capitalised upon. Most CIOs in the sector agree that their biggest advantages are huge quantities of data and the breadth of specialist knowledge that they already own but which are not effectively being monetised. We may also see a trend towards these organisations producing their own digital products as the role of the CDO evolves. There are many areas of the property sector that would benefit from digital growth such as building and facilities management, energy efficiency, design and architecture and no company is likely to develop a one-for-all solution.  

Finally, in most cases there is room for the co-existence of start-ups and large corporates and both have the power to disrupt in their own ways. Recently, we have seen the emergence of incubators and accelerators designed to provide funding and industry knowledge for a share in their profits. In 2014 Spire Ventures &  Cushman & Wakefield formed a Strategic Partnership to create Pi (property innovation) Labs - an accelerator focused specifically on backing technology start-ups with a property focus.

Certainly, as a sector that has a lot of unrealised potential for technological disruption, property and construction is one to watch.