Proptech, the convergence of property and technology, is reshaping the
way real estate is built, occupied, managed, transacted and recorded. Like the
financial technology (fintech) industry, the proptech industry revolves
thousands of start-ups looking to disrupt the way real estate markets work, and
the venture capitalists who support them.
In Hong Kong, some
companies working in property have begun adopting proptech, but by and large,
the industry and regulators have been slow in tapping into these advances,
which analysts attribute to a few factors.
● Hong Kong’s
high living costs and history as a traditional financial centre have held back
innovation and tech development, according to JLL.
● Red tape.
Regulators are swamped with daily tasks, and would require a special task force
to lead the initiative, says chairman of the land surveying division at the
Hong Kong Institute of Surveyors (HKIS) Conrad Tang.
competitive agency business and stagnant secondary market. Home sellers are not
incentivised to invest in marketing.
Still, the private
sector has benefited by adopting proptech solutions, such as co-working space
operators using sensors to detect vacant rooms and cubicles to fully utilise
space, says JLL.
And such growing
trends are drawing investments. JLL said in a November report that 179
start-ups in Asia-Pacific have received US$4.8 billion, or over 60 per cent of
the world’s proptech investments since 2013, with Hong Kong and mainland China
taking US$3 billion of that amount.
Hong Kong is also
aiming to become a global hub for innovation and technology, earmarking HK$50
billion (US$6.37 billion) this year to boost the tech sector.
Here are some key
trends to watch.
Fitting smart spaces together, better
Internet of Things (IoT) devices, Wi-fi connectivity and cloud computing, smart
building and office design are redefining workspaces and building management to
improve space utilisation, increase productivity and energy efficiency,
according to Jeremy Sheldon, managing director for markets and integrated portfolio
services, JLL Asia-Pacific.
Increased interaction among staff in shared workplaces have prompted
large firms like HSBC, Deloitte and Manulife to opt for co-working spaces.
Swire Properties, whose offices are fitted with LED sensor light with auto
on/off function, has signed an agreement to lease four floors of 54,000 square
feet to WeWork in a commercial tower in Taikoo Shing.
building management system helps to centralise the operations of building
service components – from CCTV and access control to heating, ventilation and
air conditioning, efficient use of energy – that can aid owners achieve green
building accreditations, such as LEED issued by the US Green Building Council
and BEAM Plus by the Hong Kong Green Building Council.
Big data analysis helps agents connect buyers and sellers
teamed up with agent chain Ricacorp to launch Rica+, an AI-powered home
According to Microsoft, Rica+ combines AI and machine learning to
analyse listings, transactions, bank valuations, prices and customer
preferences to maximise the chance of closing a sale for Ricacorp, which has a
has a database of 1.7 million flats, 4.8 million individuals and documents
related to 1 million companies to organise.
VR and AR for home viewing
Estate agents are
embracing virtual reality (VR) and augmented reality (AR) technologies to offer
immersive viewing experience, especially when the buyer or property is
expat-focused agent OKAY.com use Matterport, a US-based VR company, to produce
and publish VR footages on their websites.
International Realty has launched a mobile AR app,which it says, brings a
home’s virtual staging images from 2D perception into augmented reality
allowing the user to virtually furnish and decorate a vacant space.
“When a client
purchases a property, it is not only a matter of money. It also reflects his
personal taste and lifestyle. The app … brings out the true potential of the
home,” says LIST Sotheby’s International Realty Hong Kong chief operating
officer Binoche Chan.
But VR adoption by local agents is slow, compared with the US. “When
agents are all competing to match clients with landlords, there is less
incentive for the out-of-pocket expenses associated with VR and other
investments in marketing the property,” says OKAY.com chief technology officer
Mobile apps for homebuyers and homeowners
While it uses VR
technology to entice potential buyers of a Sai Kung project of the location’s
coastal beauty, Sino Land also adopts a wide usage of mobile apps to provide
buyers and agents with updated project sales information.
"The app … brings
out the true potential of the home"
BINOCHE CHAN, SOTHEBY’S
Owners of existing
projects may use another app to access concierge and clubhouse services, order
delivery, read notices and contact service staff, according to Sino’s associate
sales director Victor Tin.
The AI shopping concierge
underlines the success of online shopping at the cost of bricks-and-mortar
store sales, is now being adopted by retail property owners and malls to lure
Malls operated by
Link Asset Management has allowed Asiabots, a start-up specialising in AI chatbots
and supported by an incubator programme run by Hong Kong Science and Technology
Parks to put its AI concierge app into use in an initial project.
“Whenever the shopper visits a Link mall, he can ask the app any question, and the bot will tell the location of the shop, restaurant or anything else the user is looking for,” says Asiabots founder and CEO Thomas Wong.
The AI concierge also collects and analyses shopper interactions to turn
the data into useful analytics for Link and its tenants.
Facial recognition tracks foot traffic and profiles shoppers
Shopping malls and
retailers are increasingly using facial recognition technology to track
customers and collect data about their demographics, according to Eric Or,
managing director for Hong Kong and Macau at Jardine OneSolution, which
develops and implements facial recognition systems to track foot traffic and
identify basic demographic data like gender, age and ethnicity.
“When using sensors and cameras to collect personal data, it also involves privacy and security issues. That’s why retailers also have to think about investing in data security to prevent costly data breaches,” says Or.
BIM gaining traction in construction sector
information modelling (BIM) is a 3D process that plays a pivotal role in a
construction project – allows for more collaborative, cost-effective and
efficient processes throughout the design, construction and implementation
stages of a building. While cities such as Singapore have made BIM mandatory
for public projects, Hong Kong’s construction industry is playing catch-up.
In a recent
circular, the Hong Kong government said it would pursue the use of BIM
technology in capital works projects starting in 2018.
The industry hopes
that the proposed development of a territory-wide, common spatial data
infrastructure (CSDI) will help integrate BIM and geospatial data of Hong Kong.
CSDI is essentially a mix of all geographic data and inputs onto a single
platform to allow planners complete spatial awareness, and undergirds what we
call smart city development.
Until three or four
years ago, 3D printing was uncommon in the construction industry. It is now
being used by architects, engineering firms and interior designers to validate
design for manufacturing and assembly, the feasibility of the design, enhance the
effectiveness of construction and eliminate uncertainties.
software such as Rhino and Sketchup to create 3D models of their designs. These
3D models can be used to generate movies, renderings and physical models of the
designs. 3D printers create physical models of the designs within a few hours,”
says Keith Griffiths, chairman and global design principal at architecture firm
Aedas. “Many different design options can be drawn and examined on the computer
screen before the most promising options are 3D printed for further analysis.”
director and architect at P&T Group, says Hong Kong is an ideal place to
introduce prefabricated prefinished volumetric construction (PPVC), which has
been in use in Singapore for a few years.
PPVC refers to manufacturing prefabricated modular units in a factory off site before they are transported to the site in blocks and fixed to a structural frame.
“It alleviates construction worker shortage, minimises air and noise
pollution, shortens construction time and improves site safety,” Soon says.
“The technology is ideal for project owners who prefer standardisation and
efficiency to customisation, like public housing, hospitals, schools, etc”
But PPVC has
limitations. As buildings are constructed block by block, structurally the
building cannot be higher than 20 storeys. Given the very tight plot ratios in
urban areas, developers want to build higher and denser, making the technology
unsuitable for high rises, at least for now. Prefab buildings’ other trade off
is aesthetics and style.
Blockchain for title registration – mother lode of smart contracting
antiquated deeds registration system and an equally dated regulatory framework
are in pressing need of reform, according to experts.
“The entire UK,
where the legacy system was inherited from, already switched to title
registration in the early 1990s,” says Tang of HKIS. “If there is no reform,
which was actually enacted in 2004 as the Land Titles Ordinance, to simplify
title registration and transfer, Hong Kong can’t claim itself to be a real
Under the existing system, the Land Registry only serves as an index and
does not legally prove ownership of a property. As part of the conveyancing
process, both the buyer and seller have to separately hire a solicitor to make
sure the seller truly owns the property.
"If there is no
reform, which was actually enacted in 2004 as the Land Titles Ordinance, to
simplify title registration and transfer, Hong Kong can’t claim itself to be a
real smart city"
CONRAD TANG, HKIS
Tang points out
that while the government may have scanned deed documents, the text within
these scans are not searchable. To move forward, it must digitise all deeds,
and then carry out an exhaustive land survey to identify boundaries, easements
There are then
legal obstacles to clear to make way for blockchain. The Hong Kong Monetary
Authority had concluded in a white paper that a computerised blockchain title
registration system is not possible under the current legal regime. One
statutory requirement stipulates that “for any land transaction to be valid is
that it has to be made in writing”.
to title registration and then to blockchain offer clear rewards. Title
registration will bring in clearer land and property ownership; faster
conveyancing process; automation and transparency; and fewer legal disputes.
Using blockchain allows for a smarter and more transparent system, and would
cut down the lengthy process of recording and transferring titles, with the
added benefit of virtually bulletproof transparency.
(The full version of this article is published in the May issue of The Peak magazine, available at selected bookstores)
www.scmp.com, Wednesday 16 May 2018, 833