New findings from Osborne Clarke highlight the need for greater government collaboration with start-ups and universities to drive smart cities forward

• Technology experts believe occupiers (37%), governments (33%) and property developers (33%) are holding back the development of smart cities
• Tech giants, tech start-ups, and universities are identified as the groups who have the know-how to support smart city development (54%, 54% and 40% respectively)
• 81% of technology experts believe the property industry focuses too hard on the cost of technology and not enough on the benefits

Over a third of technology experts believe occupiers (37%), governments (33%) and property developers (33%) are the groups most likely to hold back the development of smart cities, according to research from international legal practice, Osborne Clarke. The report, Future Proof Real Estate, builds a picture of how the technology sector thinks innovation will change the face of the built environment in Europe over the next three to five years.

Technology giants (54%) and technology start-ups (54%) are, however, seen as the main groups with the know-how to support the creation of smart cities. Respondents believe these groups will play a role in the development of smart built environments (48%, 52% and 42% respectively).

Universities, too, are regarded as important groups in the development of smart built environments with 40% of respondents saying they see universities as extremely knowledgeable in the creation of smart cities. This can be demonstrated in the example of Bristol, which recently won the GSMA’s Smart City Award and has been named the UK’s smartest city. These awards were the result of innovative, collaborative programmes such as ‘Bristol is Open’ – a joint venture between the University of Bristol and Bristol City Council – which provides a large scale connectivity testbed to ensure services are effectively implemented.

Commenting on the findings, Conrad Davies, Head of Real Estate and Infrastructure at Osborne Clarke said, “Bristol is a prime example of how the public sector can work alongside tech start-ups and universities to create smart cities that are going to make real impact in the future. The city is truly leading in the way in it uses technology to transform the way we live, work and study in cities.

“The property sector needs to have more open and collaborative discussions; only once all these parties are aligned and working towards the same goal, will smart cities become widespread. Take government for example; when a local authority or government agency is awarding contracts for development projects, it will score tenders against pre-decided evaluation criteria. What if, instead, they engaged with property developers, builders, investors, technology companies and universities earlier in the process to discuss new innovative solutions to their brief?”

Tech experts leading the way

The majority of respondents (83%) think that tech experts should play a key role in how the built environment operates, and 79% believe they are already showing the property industry how to integrate technology into the built environment. A majority of technology experts (76%) also believe that tech giants are likely to become significant landlords in the future.

Despite this, there are barriers to tech experts advising decision makers in the property sector, as a majority think that they are struggling to communicate to investors the costs and benefits of tech in the built environment (78%).

Furthermore, 81% of respondents believe technology adoption is being prevented due to the property industry being too focused on costs over benefits (81% agree), not being included in infrastructure planning (81% agree) and due to a belief that construction costs are more important than the long-term benefits of technology (79%).

Full details at Osborne Clarke

Proptech: Tech experts say London is the leading city in Europe when it comes to the usage of technology in the built environment, according to research from Osborne Clarke

The report ‘Future Proof Real Estate – is the property sector ready for the 2020s?’ builds a picture of how the technology sector thinks innovation will change the face of the built environment in Europe over the next three to five years.

Over two fifths of experts (42%) believe that London is leading the way, well ahead of rival cities from the continent. Amsterdam (28%), Berlin (26%), Paris (23%) and Stockholm (23%) follow London to rank in the top five cities for PropTech in Europe. More importantly, experts still believe London is most likely to rank number one in five years’ time (39%).

Conrad Davies, Head of Real Estate and Infrastructure at Osborne Clarke said: “The UK capital has a long, successful history with the property market, attracting developers, investors and landlords from all over the world.

“London is also the technology capital of Europe, largely driven by the fact that it attracts the most venture capital investment in Europe and has a mature tech ecosystem. These two factors combined mean it is understandable that London is fast becoming the PropTech capital of Europe.”

There are also a number of trends helping drive an increased interest in technology in the built environment. Davies explains more: “Real Estate in London is also vulnerable to a number of trends driving the PropTech agenda; co-living (driven by housing shortages and London prices) and co-working (driven by the increased demand for flexibility) both of which rely heavily on technology.”

Despite London ranking number one now, Amsterdam, Berlin and Paris are expected to close the gap in the next five years according to technology experts. Technology experts believe London will still lead the usage of PropTech in five years (39%), but the gap between it and other capitals will become less significant as the likes of Amsterdam (33%), Berlin (32%), Paris (32%), Stockholm (29%) increase the use of technology in the built environment.

The reason for this is other cities witnessing accelerating digital innovation in the property sector. “The Netherlands, for example, is already developing a number of smart ‘neighbourhoods’, including Strijp-S in Eindhoven and Slim Seingraaf in Duiven, whilst increasing investment into automated vehicles and intelligent travel systems.”

Germany, too, is seeing changing attitudes towards digital innovation in real estate, where exciting business problems have now been solved, such as using new technologies to revolutionise portfolio management or logistics and fulfilment. Similarly, in Paris government programmes are helping to drive the acceleration of PropTech investment.

Davies concluded: “The real-estate sector has been criticised in the past for being an industry that has failed to embrace technology and innovate. However, this is changing rapidly and the market is starting to open up to the opportunities technology brings. It is a good thing for the sector – allowing those in the property industry to capitalise on new income streams and emerging asset classes. The next five years will certainly be an exciting time for as we continue to see accelerated growth in the use of PropTech in cities across the globe.”