Real estate is perhaps the last segment in an economy to be tackled by enterprenuers when it comes to innovation. Reason being the giant moats surrounding institutional real estate; high cost, construction capability, maintainance capability, ability to navigate a complex approval system, among many.
Being an inherently brick and mortar business, innovation typically tends to ‘hit’ real estate always with a lag, compared to many other sectors in the economy.
Most of the innovation is usually concentrated in the field of IT/IteS or consumption and then it trickles down, eventually, to individual sectors impacting real estate.
The segment that has seen maximum traction in real estate in terms of innovation or efforts made, is the bridge that connects supply and demand. In other words, the broker/agency/ facilitator.
A whole host of platforms, start ups, tech platforms and enterpreneurs have entered this field with the promise to enhance transparency, helping make the choices between assets simpler.
Platforms like Magicbricks, 99 Acres were start ups, even before the word “start up” came in vogue.
Every Indian looking to rent, buy or sell has used these platfoems.
It led to a second wave promising enhanced features. Who can forget the sitcom like tussle between the eccentric founder and the investors playing out on national media of Housing.com.
One hears often of tech based start ups coming into the market promising greater piece of mind. However, most turn out to be glorified brokerages run by educated, urbane folks with background in corporate real estate than genuine tech based platforms that use technology in meaningful, sustainable ways to action real estate solutions.
Then there are start ups that offer “reliable market data” that assures transparency with “cutting edge analytics” but most have been found to be data gatherers, collating figures from registered agreements available in the public domain anyway. By the time the data is published, it is already a few months old.
Sum and substance of the argument is that somehow innovation in the true sense has been starkly missing in organised real estate, with the last, true path breaking innovation perhaps being the dedicated sites for listing properties and contacting brokers, mentioned earlier in the piece.
There have been embers seen in the segment of real estate sustainibility with some startups promising to help companies do fitouts in a carbon neutral way.
There has been a proliferation of co working/ managed office players promising tech based real estate office solutions but the tech is just an app that allows one to book conference rooms.
Where true innovation has perhaps taken place is in the ownership pattern of real estate where a few new age companies have started to offer fractional ownership of assets, thus making it a more “liquid” asset and within reach of a large customer base.
All in all, given the cost factor involved in real estate, true innovation has been few and far between in real estate and most of it has been via connected sectors that have a direct impact. Consequently, start ups in the segment have also touched the sector only superficially, promising a lot but delivering precious little.
The scope is immense but would need immense patience and dare we say, good funding.
Arunabha Bhattacharya