Local Property Companies Going Big On Tech Solutions

Newsroom 08/08/2023 | 14:53

Property developers in Romania are increasingly relying on technology, from the planning to the operation stages of their real estate projects, including PropTech platforms provided by startups. Players from the real estate market spoke to BR about the main digital tools they are using to manage their projects and the way in which technology helps them meet their delivery targets for complex investments.

By Ovidiu Posirca


PropTech is a growing trend in the real estate industry, with a high potential to improve efficiency, accuracy, transparency, and overall customer experience, experts say.

“Despite some challenges, including data security and privacy concerns or its potential to disrupt traditional real estate practices, PropTech is expected to continue growing and to play an increasingly important role in real estate. The growth of PropTech is also fuelling investment in the industry, with venture capital firms and others investing in PropTech startups and companies,” says Raluca Stanislav, Center of Excellence Director: Technical & Innovations Skanska CDE.

Stanislav adds that Skanska sees advantages in improving and streamlining various processes in the industry, including property management, leasing, buying, and selling, and that digital communication platforms can provide a more convenient and streamlined experience for tenants and buyers. The company has adopted Skanska Solutions, developed by Romanian startup Bright Spaces, which has raised EUR 1.7 million to date and is looking to expand across several markets in the region.

The platform was implemented for the first time in Romania for the Equilibrium project, developed in the most important business area in Bucharest.

“We continue to actively support the creation, adoption, and implementation of tech and PropTech solutions and we are constantly searching for innovations that best suit our needs,” Stanislav added.

Meanwhile, Alexandru David, head of research at real estate consultancy JLL Romania, points out that the PropTech sector is still in its infancy in Romania, but also that it has great potential in the near future. He says that clients are increasingly focused on digitalization and automation and they want data to be made available through a user-friendly interface.

“We are committed to developing our digital tools and experimenting with different technologies and platforms, and we will continue to do so. However, there are some limitations regarding the development of the PropTech niche in Romania. To start with, the local real estate market is rather small, especially if we leave out the residential segment and only take commercial properties into account, therefore designing applications specifically to be used by real estate companies or consultants can be quite expensive considering the relatively small number of potential buyers and the fact that it is hard to compete with international providers if you pursue larger markets,” says David.

He goes on to say that convincing end-users to embrace technology is a gradual process as they need to get familiar with the product before actual demand takes shape. There is also the challenge of expensive financing in Romania, along with the reticence of business angels to back such niche products.

Building a PropTech platform has to start with data collection, which needs to be available in large quantities, be reliable, have continuity and uniformity, and be constantly updated.

“We lack data providers for buildings. I think a good idea for a startup would be to create easy-to-use tools to collect building data and consumption parameters, to diagnose equipment or structural damage in buildings, and to measure how a building behaves under seismic action. On the other hand, it would also be worthwhile to explore virtual and augmented reality when presenting properties to clients, as well as tools to generate a wide range of fit-out scenarios or specific software to estimate construction costs, just to give a few examples,” the JLL representative adds.

Digitalization is already having a substantial impact on property management activities and consultancy firms are leveraging these tools to generate efficiency for real estate clients. For instance, CBRE Romania is using a tenant management tool that has reduced response and intervention time by 50 percent.

“Additionally, we utilise proprietary digital tools for interactive reporting and monitoring, automated bidding processes, and property accounting. Furthermore, our environmental, social, and governance (ESG) platform, developed in collaboration with Deepki, monitors and enhances the ESG performance of our properties in a pool of more than 10,000 assets that CBRE manages across the globe, underscoring our steadfast commitment to sustainability,” says Valeriu Toma, head of property management at real estate consultancy CBRE Romania.

According to Toma, startups have immense potential to profoundly influence the development landscape for commercial buildings.

He adds that two prominent niches are gaining traction at the moment. The first pertains to ESG, encompassing all aspects that contribute to enhancing a property’s performance, energy consumption, occupant well-being, and community impact. The second revolves around automation, which drives efficiency by incorporating maintenance robots as well as bots and RPAs for guidance and streamlining everyday operational tasks.

Tech Solutions Adopted by Developers

David of JLL suggests that many real estate players in Romania are committed to using technology, and they are actively searching for solutions to improve their operations and performance, because it is to their own and their clients’ advantage.

“I believe such solutions should be developed together with those major players, in order to maintain costs and risks at reasonable levels and make sure that the proposed solutions actually respond to specific needs,” he adds.

At Romanian development firm One United Properties, designers use an entire array of digital tools in the development process, ranging from 3D modelling to Building Information Modelling (BIM), which provides a holistic process of creating and managing information for a built asset.

BIM integrates structured, multi-disciplinary data to produce a digital representation of an asset across its lifecycle, from planning and design to construction and operations.

“We were the first developer in Romania to transition our entire office portfolio to a fully integrated digital showcasing, fit out, and leasing platform, powered by Romanian PropTech company BrightSpaces. Through this platform, any potential occupier can visualise an entire 3D environment that’s focused on the project, then a particular available unit, moving on to a 3D tour of the space and a detailed fit out generation, with metrics. This has made the pre-leasing process infinitely easier and more visual, especially for people experiencing it who do not have a real estate background,” explains Mihai Paduroiu, CEO of the Office Division at One United Properties.

Elsewhere, local developer Forty Management is using technology at every stage and step of its development projects. It starts from the area of 3D design and analysis and goes up to property management applications.

“All our operations have a tech component or are technology-oriented,” says Lucian Azoitei, the CEO of Forty Management.

As a developer, Forty Management uses development monitoring applications in the property management area, either as an owner or as part of a team that includes the owners of the respective outsourced services. The company is also using digital solutions for the marketing side, such as 3D visualisation and rendering tools.

For Skanska, the Building Management System (BMS) provides real-time access to all equipment, measuring energy efficiency.

“A measure that we recommend is differential heating or cooling based on occupancy levels or the needs of each space or tenant. Also, reducing ambient temperature by up to 2-4 degrees can cut energy consumption by up to 15 percent,” says Stanislav of Skanska. In the Equilibrium office project, the developer implemented a system that monitors the consumption of each area of the building in real time, with a dedicated dashboard located in the building’s reception area.

For residential developer STC Partners, digital tools are important to the successful management of the residential development process, but it is still essential to understand the process itself, because the tools can only be as good as their users.

“Specifically, we use digital tools related to building/construction management design/execution and the sales & marketing functions in our residential developments. Using such tools efficiently supports us in optimising our decision-making and reaching high-quality results. Given the continuous advancement in technology and the new applications impacting the residential segment as well, I think digitally oriented developers will perform better over the long term,” says Adi Steiner, managing partner of STC Partners.

Creating a supportive regulatory framework, offering financial incentives, and showcasing the success stories of early adopters will encourage real estate players to embrace technology, consultants suggest.

“The main entry barrier is the business case: startups should focus on developing solutions that address a very specific industry need, can easily scale, and remain flexible to adapt to future changes on the market. By combining these efforts, the adoption of PropTech solutions can be accelerated, bringing efficiency and competitiveness to the Romanian real estate sector. Otherwise, we risk adding yet another digital solution to an already crowded toolbox—one that may appear promising but fails to be embraced and utilised by anyone,” argues Toma of CBRE Romania.

In the residential segment, Romanian startup Milluu raised EUR 1 million in fresh funding earlier this year and it is looking to expand to Poland. Florin Stoian, the CEO of Milluu, said that the startup had 300 apartments in its portfolio and that it would use the funding to scale up the business abroad.

“The real estate sector in Central and Eastern Europe is strongly influenced by divergence to more developed western markets due to historical circumstances,” said Tomasz Golinski, founding partner at CofounderZone, which led Milluu’s new funding round.

Proptech Gains Prominence in Decarbonisation Strategies

The ESG strategy is already becoming a “must” for large real estate groups, as investors have started to scrutinise sustainability criteria when looking to purchase certain property assets. This is why companies are using technology to understand how their buildings are performing when it comes to energy usage optimisation and other decarbonising activities in building management. This valuable data is also a strong point for potential investors that may want to purchase such buildings.

PlanRadar specialists point out that an AI-powered platform can analyse data from sensors that are installed in buildings to monitor things like temperature, humidity levels, and CO2 concentrations. It then uses this information along with weather forecasts from weather stations nearby or on-site (if available) to predict daily peak electricity demand for each unit within a building complex. The system then sends notifications about these peaks so that tenants can adjust their usage accordingly by switching off lights/appliances during peak hours or even reducing room temperatures slightly if required, according to an analysis by PlanRadar. All in all, we will be seeing more intelligent buildings that use data from sensors to monitor energy usage and respond accordingly. This is where startups can provide innovative ways to translate the results into actionable points for landlords.

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