Three suggestions offered to local proptech industry - China Daily



Three suggestions offered to local proptech industry

In 1950, Tokyo and New York were the only two urban agglomerations in the world with a population in excess of 10 million. But the number of cities with more than 10 million inhabitants — "megacities" — is expected to reach 43 by 2030. As a result, property technology (proptech) has become a prominent technology category in recent years, with lots of advancements and initiatives. One of them is the recent collaboration between the Hong Kong PropTech Association and Cyberport to promote the adoption of innovative solutions in the industry.

In the association's news release, it was stated that the goal of the collaboration is to build a green smart city with technology, and optimize the urban living environment. Examples include the use of innovative technology for building inspections, drone inspections of building facades, image analysis to monitor site safety, and the use of geospatial systems and data to facilitate construction planning.

Actually, that is only a part of proptech, which covers the entire building life cycle, from design, construction and management to maintenance. It also includes a wide range of software and services; namely, property management (such as rental listings management, applicant management, reporting and analysis, maintenance, and day-to-day management), asset management (online/offline rent payments, portfolio management, evaluation, and financial management), sales and advertising, work-order management, and customer relationship management (e.g., customer service, customer experience management and analytics, sales automation, and social media detection).

Market research and consulting firm Grand View Research expects the global market value of proptech will grow from $29 billion in 2022 to $94.2 billion by 2030, an increase of more than 3.2 times in eight years. North America accounted for more than 55 percent of the market share in 2021, but the Asia-Pacific region is expected to be the fastest-growing area, mainly due to increased investment in proptech across the region, particularly China and India, which amounted to $12.5 billion and $9.1 billion respectively in 2022, according to the Grand View Research's report.

How can Hong Kong enterprises, especially startups, exert their efforts in this area of opportunity? I have the following three suggestions:

First, to have sustainable development, both micro and macro perspectives are needed to be taken care of.

One of the goals of proptech is to build a sustainable living environment like smart cities, so the government and the industry should not focus only on the near term.

In mid-January, the Hong Kong Construction Association released its latest survey, which estimated that there was a shortfall of more than 18,000 local construction workers. At the same time, in order to enhance the productivity of the construction industry, the Development Bureau has recently published a consultation document titled "Roadmap on Adoption of Building Information Modelling (BIM) for Building Plan Preparation and Submission", which actively promotes the digitalization of the industry and repeatedly mentions the synergy between BIM and geographic information systems (GIS).

To put it simply, the division of labor between the two technologies is that GIS focus on the macro environment, while BIM focuses on the building itself.

For example, in order to build a livable building, in addition to focusing on the building itself, it is also necessary to make good use of the surrounding environment to achieve good indoor ventilation and abundant natural light, which can not only improve the comfort of the occupants, but can also help prevent the spread of epidemics, reduce electricity consumption, and help Hong Kong move toward the goal of carbon reduction.

The integration of GIS and BIM can be widely used in the whole life cycle of construction projects, while promoting the big-data analysis and management of smart cities, especially when the real-time data can reflect the current situation and assist in making the best decisions.

Take the planning and design stage as an example, the combination of these two technologies can take into account various indoor and outdoor factors at the same time, and create an accurate 3D digital twin for building site selection, energy design, surrounding transportation planning, structural design, indoor acoustic design, climate condition assessment, building design review, performance evaluation, and more.

This integration is not only applicable to new construction works, but also to the revitalization and refurbishment of old buildings, including the operation and maintenance of disaster response and risk management, energy management, indoor navigation and facility management. During the implementation of large-scale projects, the integration of GIS and BIM can provide real-time geospatial analysis from GIS, as well as material information from BIM models, to assist in estimating waste quantities, sorting, loading, and transport.

Therefore, the government and the industry should combine these two complementary technologies when promoting digital construction and proptech to build sustainable and people-centric cities.

Second, opportunities for the property management industry in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) are not something we can miss.

As of October, more than 750 property management companies and over 12,000 practitioners in Hong Kong had been licensed. Hong Kong is the only city in the GBA to implement a property management licensing system, which serves as a role model for the industry in other regions to promote professionalism and quality.

The Hong Kong Property Management Services Authority (PMSA) cited data from the National Bureau of Statistics that the Chinese mainland's urban permanent population exceeded 920 million in 2022, accounting for over 65 percent of the country's population. Over the past 10 years, the per capita residential floor area of mainland cities has increased by 25 percent. After the completion of the 14th Five-Year Plan (2021-25), it is estimated that 30 billion square meters of buildings across the country will need property management, which is believed to accelerate the development of the property management industry.

At present, the focus of the property management industry on the mainland is mainly on residential property management services, but with the development of the market, the growth is expected to slow down. In contrast, property management services for commercial properties are in their infancy on the mainland. In 2020, the penetration rate of property management services in commercial properties was less than 10 percent. The PMSA suggested the property management industry in Hong Kong export its professional services to the GBA mainland cities as local practitioners have had extensive experience and proven expertise in managing large-scale residential and commercial properties.

While exporting the professional service, Hong Kong's property management industry also needs to enhance the professional level of its services and develop in the direction of humanization, intelligence and sustainability.

Third, artificial intelligence (AI) can improve efficiency and make the valuation of startups 20 percent higher.

In Hong Kong, AI is also a hot element in proptech applications. For example, the electronic touchscreen can quickly answer customer questions, reducing the demand for staff. Analyzing the flow of people with AI images and displaying the utilization rate of a club's facilities in the mobile app helps users avoid busy hours. In addition, AI can help respond to emergencies early, especially in gyms that are open 24 hours a day, as an alarm can be raised immediately to ensure the safety of users if they are detected fainting. It can be said that AI can supplement the workforce of industries, and improve service quality and employee efficiency.




Dr. Winnie Tang
Adjunct Professor, Department of Computer Science, Faculty of Engineering; Department of Geography, Faculty of Social Sciences; and Faculty of Architecture, The University of Hong Kong