24 June 2020
These are unprecidented times in which much uncertainty remains about the future for real estate owners, occupiers and service providers. The business models of both big names and small are under the microscope. As we consider the easing of lockdown, signs of the new normal are already visible. And some of the trends which are driving the direction of travel have in fact been with us well before the current crisis. They have just been magnified and accelerated.
Across the board, businesses are looking at the way they operate through a very different lens. Operational resilience will be key – aspects as varied as diversity of international supply chains and flexibility of accommodation strategy will be affected. The balance between what activities can be undertaken remotely online and those which require physical presence are likely to be changed forever. Efficiency will also be critical, not least of all to bring down costs in a lower return environment. This is especially the case in highly frictional transactional and management activities.
These changes will in large part depend on easy access to consistent reliable data to underpin efficient processes and enable remote working. And right now, in the real estate industry this remains a weak spot – we are not good at standardisation and much of our data is still subject to manual manipulation. The more this happens, the more room there is for error. And the more we create multiple versions of the truth, the less reliable and resilient our data becomes.
Now more than ever
But while many businesses find themselves in survival mode, is now really the time to be focusing our attention on how we are creating and using data? It’s a "yes" from me. Efficient and resilient businesses driven by accurate data are the ones that will not only survive but thrive. We have been forced to make many changes "in weeks where decades happen". Informed by the realisation of what it is now possible to achieve with new ways of working, we have the opportunity to digitally enable new processes rather than making incremental changes to existing practice.
Take, for example, the most common process for agreeing the terms of leasing transactions and lease data administration. Typically, agents, lawyers, property managers and valuers manually create and recreate documents from data, and then data from those documents, over and over again. Even writing this down makes it sound convoluted and in the real world it is often worse. New forms of occupational agreements are likely to emerge out of the current crisis, reflecting different terms and changes in the balance of risk and reward between the parties. But without changing the process by which they are negotiated – and the way resultant data is managed – the same problem will still exist.
I started to look at this challenge last year with my colleagues at leasle. We came to the view that the only surefire solution lies in capturing accurate leasing data just once as it is created so it is traceable back to source documentation. Such a "golden source" of data can then be used in a reliable way by all parties, including subsequent prospective purchasers and their advisers.
We therefore set out to provide the industry with a product that is simple to use, speeds up the negotiating process for both heads of terms and leases, and also simultaneously delivers a robust dataset that is intrinsically linked to formal legal documentation. The fact that we are bringing this to the market during the one of the most difficult periods that real estate has ever experienced of course brings its own challenges. However, although none of us would want to be in this position, in some ways it could not be more timely.
Our aim, therefore, is to support the industry in establishing a "new normal", with the emphasis firmly on the "new", as well as the "normal". Having efficient, resilient processes and fundamentally accurate data is vital for investment performance and efficient business practices, now more than ever.
Click here to see the original article in Estates Gazette.BACK TO NEWS SUMMARY