MIPIM Asia Live Report: Technology disruption in real estate
What exactly is the meaning of disruption in real estate and to what extent will this disruption impact the global market? That is a question being asked to global CEO’s at MIPIM Asia today during the “MEET THE CHAIRMEN – DISRUPTION AND REAL ESTATE” conference panel.
Many innovations are being introduced in the Real Estate indusrty that make it relatively easier and more efficient to conduct business. One good example is Patrick Ghilani’s MRI Software that tries to find the “convergence” of consumer and business users and offer better solutions for real estate developers by becoming an enabler. Firms are thus embracing the change rather than going against the grain by seeing these disruptions as opportunities to derive potential benefits from. Technology can be seen as a risk mitigator rather than a problem since it offers new solutions that can be less costly and less time consuming. Real estate developers should start to embrace the change or risk being left behind by the fierce competition growing globally. Hong Kong was presented as an example of an economy that is safe from any massive technological impact because of its limited property supply, thereby having shortage of location supply for developers. This mitigates the scale of technological impact as opportunities are harder to come by. Although disruption can bring many benefits to real estate firms, developers still have to rely on the fundamentals by acknowledging the transactional and emotional relationship, according to Dr Justin Chiu, Executive Director of Cheung Kong Property Holdings Ltd. It is vital that technology not be disregarded because these disruptions have provided a simpler and more efficient solutions.
A question about comparing India to Hong Kong was raised by the panelist, but it was suggested through interactions that it is wrong to compare India to Hong Kong because a city shouldn’t be compared to a country. Other factors such as culture, play a large role, and therefore further complicate a comparison. Hong Kong citizens prefer to place retail in shopping malls but the various cities in India may approach retail different depending on demand.
Grant Kelley, Chief Executive Office or City Developments Limited, discussed the concept of mix-use development, stating that these mix used developments depend on location. He suggests that mix-use offers diversified cash flow on both the asset and portfolio level which hedges against the risks of any single property type by offering various options.
Dr. Justin Chiu did a fine job of concluding the panel by commenting on dislocation by saying “wherever there’s a dislocation, there’s opportunity.” The United Kingdom was mentioned as one of the locations that can be considered dislocated. Each real estate firm has different mandates to follow and that depends on the returns they’re looking for.