The increasing digitization of our society does not stop at the real estate industry: The number of so-called PropTech companies has risen continuously on the German market in recent years.
These are companies that are using the latest information and communication technology to further advance the digitization of the real estate market. Typical activities include, for example, the optimization of processes or the development of new business ideas. The PropTech.de blog portal now has a total of 466 PropTech companies in Germany; in September 2018 it was 300.
New study reveals views of PropTechs
Due to the growing importance of PropTech companies for the real estate industry, the Technical University of Aschaffenburg recently published a study on this topic in cooperation with Blackprint Booster GmbH and the PropTech consulting company Brickalize. The “PropTech Germany 2020” study, however, differs fundamentally from the previously published papers: It primarily considers the perspective and opinion of PropTech companies instead of just treating the views of established real estate companies.
The main focus of the study is to examine the challenges PropTech companies have to face when entering the German real estate market.
Obstacles for PropTechs when building a new business model
According to the study results, 94 percent of PropTech companies perceive the greatest hurdle as the difficult access to data and its analysis. The lack of transparency on the German real estate market significantly restricts companies in their work and makes it difficult to set up a new business model for digitizing the real estate industry. The second biggest obstacle for 84 percent of the companies is the heterogeneity of the branch; thereafter, the real estate companies’ lack of understanding of the PropTech business model (75 percent) and the lack of professionally qualified developers (75 percent) are cited as obstacles.
PropTech startups have a more negative attitude than established companies
For the study, nine PropTech companies at different stages of development were asked about market and business development, barriers to market entry and customer acquisition. PropTech companies from Germany already established on the market (grown-ups), PropTech startups (early stagers) and foreign PropTech companies with the aim of entering the German market soon took part.
According to the PropTech study, the early stageers should have a significantly more negative attitude towards the established real estate companies than the grown-ups. The startups estimate the establishment’s willingness to give orders to be significantly lower, which is not least due to the not yet fully developed networking of the early stages in the real estate industry. In addition, according to the authors of the study, the startups complain about a lack of willingness to take risks on the part of real estate companies, which are open to the exchange of information but do not want to conclude contracts or make investments.
The establishment’s openness towards PropTechs is growing
Overall, however, according to the study, the PropTech companies are largely positive about the current developments in cooperation with real estate companies. The establishment’s activity has grown significantly and customers are also increasingly open to the new business models of PropTech companies. “Basically, companies need digital solutions, even if they do less operationally,” explains Sascha Donner, co-founder of the PropTech company EVANA. And the established real estate companies obviously perceive it that way: “The demand for PropTech companies will increase sustainably; it’s a good market, ”predicts the expert in the study.
Corona crisis raises awareness among the establishment
Real estate companies are said to have increasingly approached PropTech companies, especially in times of the corona pandemic. The main reason for this is probably the sudden change in work modes in companies and the increasing pressure on real estate companies to keep up with the technological change in the corona crisis. “Everyone who thought they were digital before Corona has now realized that they are not in the slightest,” explains Dominik Kraatz, Managing Director of PropTech Inzept3D. The pandemic has caused a rethink in the real estate industry and highlighted the need for digitization in many areas of the real estate market. For this reason, 56 percent of the PropTechs surveyed do not consider the consequences of the corona crisis to be dangerous for the company’s development; What’s more, many PropTechs even describe the crisis as an opportunity for their own business model.
PropTechs are open to collaboration
Many PropTechs are also planning to work with other PropTech companies in the future in order to be able to present customers with a better complete solution for their business processes. Around 78 percent of the companies surveyed are already cooperating with other PropTech companies; all companies in the study (100 percent) plan to work with other companies in the future.
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