Real estate is a cornerstone of the global economy, with the commercial property sector alone estimated to be worth $149.67 billion (€138.49 billion) in the UK in 2024, supporting over 2.6 million jobs. As technology advances, improving operational efficiency in real estate is critical. Yardi has partnered with the European Public Real Estate Association (EPRA) again to gain up-to-date insight into property technology adoption in the real estate sector. The results show that businesses are increasingly adopting technology, but it also uncovers areas where further innovation and investment are needed.
“The EPRA Proptech Survey 2024 reveals the need to transform European real estate with technological innovation at its forefront. This report underscores the sector’s commitment to integrating advanced technology solutions, driving efficiency and shaping a smarter, more sustainable industry.”
– Iskren Marinov EPRA Index Analyst, Membership Manager & Proptech Committee Member
Key Attitudes Towards Property Technology
One of the standout findings of the survey is the shifting mindset towards property technology:
- 66% of respondents agree that technology is no longer just an IT issue but a core business strategy.
- 52.6% of companies now have a dedicated internal tech team, highlighting a move towards in-house digital expertise, with only 7.5% outsourcing tech solutions (a significant drop of 18.5% since 2022).
- 67.2% of participants reported needing better insights into asset and facility management operations, a dramatic 46% increase from the previous year.
These stats suggest that while the sector has been slow to embrace property technology in the past, there is now a clear shift towards integrating technology as a strategic business decision.
The Impact of Technology on Operations
The survey also highlights the growing reliance on technology to streamline operations:
- 41.8% of businesses use 1-3 property technology solutions, showcasing a commitment to digital strategies.
- Nearly 50% (approximately 49.3%) of participants want to see technological improvements in market data management, with less focus on budgeting and forecasting processes.
- However, only 28.4% believe technology will significantly impact company performance in the next five years, signalling that there is still some hesitancy or uncertainty about the tangible benefits of full digital integration.
The Changing Real Estate Market
The market focus in European real estate is also undergoing a shift:
- Residential assets are rising, with a 14% increase in residential portfolios compared to 2022, now making up over 33% of respondents’ portfolios.
- Industrial portfolios have grown by a remarkable 20%, while student housing portfolios have increased by nearly 3%.
- Interestingly, the number of flex office spaces has dropped by 9%, with only 7.5% of respondents reporting flex office space in their portfolio.
This data points to a growing interest in residential and industrial assets, likely driven by post-pandemic shifts in demand, while traditional office spaces remain stable.
On-Premises Technology ‘Is it still Relevant?’: An Ongoing Debate
The debate between cloud-based and on-premises technology continues to evolve:
- 71.6% of respondents use cloud technology for customer relationship management (CRM), while 58.2% use cloud-based accounting software.
- At the same time, 37.3% of businesses still rely on on-premises technology, up from 32.9% the previous year.
This shows that while cloud technology is widely adopted, some companies still prefer the control and perceived security of on-premises solutions, especially in finance and accounting.
The Need for a Clear Digital Strategy
The survey also highlights the importance of having a well-defined digital strategy:
- As previously mentioned, 41.8% of companies are already implementing multiple property tech solutions, therefore increasing the trend and need for in-house digital strategy teams.
- Yet, 70.1% of respondents stress the need to make more informed technology investments to ensure a clear return on investment (ROI) – with 52.2% still viewing technology as a lower priority than other business initiatives.
Despite these challenges, as previously highlighted, 67.2% of respondents still believe that property technology will significantly impact their business in the next five years – emphasising the need for a proactive approach to technology adoption.
Embracing Property Technology for the Future
“The truth is that the fusion of real estate and technology is rewriting the rules of the game. For entrepreneurs and investors alike, embracing these technological advancements is not just an option; it’s necessary to thrive in the ever-evolving world of real estate.”
Forbes
The 2024 EPRA Proptech Survey clearly demonstrates that proptech is no longer an optional investment but a necessity for companies aiming to stay competitive. As the industry evolves, businesses must prioritise digital transformation and leverage technology to optimise operations, enhance asset management and improve decision-making processes.
Download the EPRA Proptech Survey 2024 to discover more insights and detailed analysis from industry experts.