My last blog concerned the external changes which are affecting property. This post considers the way in which the property industry itself is changing and the role of PR in promoting it. Taken from my soon-to-be-published book, it was written before the days of the coronavirus crisis which has undoubtedly affected the industry for years to come. While we battle the impacts of the current crisis, it’s important that we don’t overlook other (possibly more enduring) forces shaping the industry.
Reputational challenges
A report carried out by the Quoted Companies Alliance and BDO LLP shows that a significant proportion of a company’s value – around 28% – is accounted for by its reputation. And in an industry where stakeholder voices are increasingly heard – from residents only too happy to leverage various online channels (ApartmentRatings.com, Google Reviews, Facebook and others) to communicate their displeasure and frustration with property issues, to the stock market which immediately reflects damaged reputation – it is vital that public profiles are safeguarded.
The housebuilding industry in particular has suffered from reputational damage in relation to poor standards, executive pay and leasehold abuses. More generally the property industry has brought reputational damage upon itself through some of its outdated and morally questionable activities at both its annual global conference, MIPIM and at an exclusive charitable function, The President’s Club.
Environmental responsibility also poses a reputational challenge. Buildings account for 32% of global energy used and 19% of greenhouse gas emissions. The commitment to improving environmental sustainability in UK property and construction has been significant, yet greater effort is needed to meet the urgency of the climate change situation and society’s expectations. And again, the challenge is not only in bringing about the change: it is in communicating positive change and in doing so, educating, challenging preconceptions and supporting broader environmental progress.
A changing workforce
Other issues within the property sector include concern employment, and again, communications is vital in addressing this. Property development and its construction supply chain has been tangibly impacted by a shortage of suitable workers. Despite some very positive steps on behalf of the RICS and industry groups (Freehold, Planning Out, Women in Property, Women in Construction and others), the public perception of the property sector is that of a male-dominated workforce which lacks diversity. Attempts to rectify the imbalance are showing signs of success but perceptions shift at a slower pace than statistics, and tackling sentiment (albeit with the help of statistics) is the PR challenge. Furthermore, the construction industry has relied heavily on skilled European Union workers, who, at the time of writing, are leaving the UK in greater numbers than they are arriving for the first time in a decade, and more than a fifth of the workforce is over the age of 50. Communications will be instrumental in recruiting and retaining talent into the industry.
Rapid technological change
Proptech (‘property technology’) is having a substantial impact on the property industry. To name just a few examples, technology is helping us to make better use of flexible space in buildings, to create a more service-based approach, to use sensors and ‘big data’ to monitor building use and performance, and to create digital twins and virtual replicas of buildings as tools to improve design, consultation and operation.
Technology in the sector will continue its rapid advancements. In 2019, PwC identified the ‘Essential Eight’ core technologies likely to impact most on business across every industry over the ensuing three to five years: artificial intelligence, augmented reality, blockchain, drones, the internet of things, robotics, virtual reality and 3-D printing.
In a global survey of CEO sentiment, senior business leaders responded to this information: 76% stated that they were worried about the speed of change and 64% acknowledged that changes in the technology used to run their businesses would be disruptive. The survey concluded that emerging technology should be a key part of every company’s corporate strategy. This advice applies equally to the property industry.
Appendix 1 (Technology across the property lifecycle)of the report Lost in translation: How can real estate make the most of the proptech revolution? provides an excellent summary of the current opportunities for PropTech:
- Land identification
- Online land marketplace and site appraisal tools
- Consultant searching platforms
- 3D visualisation and management tools
- 3D model and geospatial databases
- Fintech solutions including crowdfunding / peer-to-peer lending platforms
- Market valuation apps and online mortgage brokers
- Technology to assist with sales and lettings including remote viewing tools
- Location research platforms
- Tenancy management tools and rental passports
- Building monitoring / home management tools and technology to assist in access management.
Increased technology will invariably lead to greater collaboration throughout the property process. So interesting developments such as the emergency of ‘cradle to grave’ owner / manager / lettings companies common in Germany, where the rental experience is more closely aligned to lifestyle, is likely to become more commonplace in the UK via our burgeoning Build to Rent sector.
Additionally, the property industry is likely to be impacted by developments in autonomous vehicles, on site power generation and storage. Surveyed by RICS in 2019, 49% of qualified surveyors stated that technology was having a ‘moderate’ impact on their role, while 34% said that the impact was ‘significant’. Looking to the future, 66% felt that changing business models were likely to impact on their future role.
The benefits of proptech must be communicated both to the older demographic within the workforce – those who are accustomed to traditional ways of working and may, understandably, be unwilling to re-learn skills – and the emerging workforce who will be entering a sector at odds with current perceptions.
The fact that PR is uniquely well placed to help the industry respond to change is evidenced in the British Property Federation’s Technology and Innovation programme report, which recognises that PR has a role to play in supporting the sector in its digital transformation. Each of its recommendations – from improving market information to championing innovation across the commercial property sector – are initiatives which require communications support.
If the coronavirus crisis cloud has a silver lining, it is that we have demonstrated that work can continue with the benefit of technology. Consequently, I predict that this speed of change will continue to increase – perhaps faster than it might have done otherwise.
The property industry plays a large part in the country’s economic prosperity, but as this blog has shown, it requires good PR to do so effectively. Promoting Property: insight, experience and best practice provides up to date guidance on how PR professionals can best serve clients and capitalise upon the opportunities brought about by change – and it’s available to reserve now.
The content of this blog is taken from my book Promoting Property: insight, experience and best practice, which is published on 30 April. Reserve online via Routledge, Amazon and other main booksellers.