Earlier this month, I attended PropTech Connect, Europe’s largest real estate tech conference in London, England. It was a wonderful event with a host of experienced presenters and attendees consisting of real estate owners, proptech vendors and consultants.
It had been a few years since I last traveled to Europe, and I was curious to see how digital buildings movement had progressed. Going into the conference, I had several questions:
- Is the European digital building market more mature than North America’s?
- How do the proptech vendors and providers differ?
- Have the Europeans figured out the recipe to implementing digital buildings, and are they more advanced?
I found the conference to be different from the typical North American ones I’ve attended—in a good way. It was actually a refreshing change from the conferences I’ve become used to, and I walked away with a few new insights. In the case you’re curious about the state of digital buildings on the other side of the world, here are my key takeaways from the conference:
1. Technology and Vendors are Mostly the Same
For the most part, the technology offerings and vendors in Europe were similar to those in North America, confirming that the proptech market is truly global. I did however notice more MSIs and engineering consultants unique to the European market. As I reflect, one thing I did not notice was very many case studies of how digital building technology was applied—which gave me the impression that the digital buildings movement in Europe may not be mature.
2. ESG and Sustainability is a Huge Catalyst
The message that ESG and sustainability are driving the adoption of digital building technologies came across loud and clear. Many European organizations are setting decarbonization strategies, and strict regulations that require reporting of emissions and building performance are emerging.
Tied to this is the concern from asset owners that less efficient buildings will lead to lower valuations. This has shifted the conversation from “I should optimize my buildings” to “I need to optimize my buildings to remain competitive.”
3. Greater Market Segmentation
I got the impression that the European market tends to segment digital buildings by asset class more distinctly than in North America. For example, I noted separate sessions on the digital approach to residential buildings, office buildings, and retail buildings.
In North America, “digital” tends to be applied more broadly across all building types. I suspect this difference is due to the structure of real estate companies in Europe, which tend to be smaller and specialize in one or two asset classes, compared to North American companies, which often manage portfolios with several asset classes. There was also a strong focus on digital residential buildings, although I’m not entirely sure of the reason for this trend.
4. A Focus on Defining the Problem
A consistent theme throughout sessions was the importance of defining the problem before selecting a technology solution. A few presenters stressed the importance of asking, “What problem are we trying to solve?” early on, before choosing the appropriate technology.
This contrasts with my experience in North America, where the focus often seems to be on implementing the latest technology to stay ahead of the competition, and only afterward figuring out what problem it can solve, or how to use it.
5. Humanizing the Approach
Another theme I noted was the emphasis on “humanizing the approach” to digital buildings. It was commented in various sessions that technology is just a tool, and the real value comes from its adoption and use by people. My impression is that European organizations seem to focus on ensuring their digital transformation efforts put people first, followed by technology.
6. A Gap in Applying Data
Despite the growing availability of data in the digital building space, it was acknowledged by a few presenters that many organizations lack the expertise to interpret and act on it. One presenter noted that this gap represents an opportunity for data scientists, a field not traditionally linked or attracted to real estate. To me, this also presents a chance for the engineering community to offer new advisory services to help bridge this data expertise gap.
7. Cautions About AI
There was a lot of discussion around AI and how it’s poised to revolutionize the real estate industry in all facets and aspects. However, several presenters cautioned that AI is not a “silver bullet.” While it will play a big role in digitizing real estate, organizations should approach AI with caution and not expect it to solve every problem.
8. Think 3P-IT
One presenter summarized the European approach to digital buildings as “3P-IT”—Proposition, People, Process, and IT, in that order. This means starting with the value proposition and human elements, and letting those guide the technology decisions. In my opinion this is quite different from the North American approach, where the technology usually takes priority.
Overall Impressions
I was pleasantly surprised by the common sense approach to digital buildings that the presenters and sessions conveyed. Interestingly, this approach shares some commonalities with the points I stressed in my last post – 5 Realities of Digital Buildings.
It is my opinion that Europe is positioned to be more sophisticated in its approach to digital buildings, largely because of its focus on putting people first. In my 15 years of experience in North America, I can’t recall an organization that I’ve worked with/for ever starting a digital building project by focusing on people first—it has always been about the technology, and of course the ROI.
When it comes to technology maturity, I found that European service providers aren’t as mature as those in North America. However, given emerging regulatory pressures and Europe’s thoughtful approach to digital buildings, I believe it is only a matter of time before Europe will set the global standard for digital building practices. I’d love to hear your thoughts on this. Am I right, wrong, or on to something? …Let me know, reach out below!
