Canadian real estate firms tentative on PropTech, finds KPMG

Real estate companies in Canada have been slow to embrace property technology (PropTech), according to a recent report from KPMG Canada.

Only 36% of surveyed Canadian real estate companies said they have a digital strategy in place, compared to 58% globally. Only 8% of Canadian real estate companies said they had a company-wide strategy.

“All industries are experiencing some form of disruption; Canada’s real estate industry is no exception,” said Lorne Burns, partner and national industry leader for KPMG’s building, construction and real estate group. “Historically, it’s been a conservative industry, but companies can no longer afford a wait-and-see approach. If you’re not already embracing digital technology and leveraging data, you run the risk of either losing market share or experiencing revenue income erosion or both.”

Larger real estate companies are more likely to have digital strategy in place: 100% of companies with assets over US$5 billion had a digital strategy in place or in development, compared to 52% of companies with under US$5 billion. KPMG recommends that smaller and medium-sized firms explore strategic partnerships or investments with PropTech firms.

“Canadian real estate companies are awakening to the digital era, albeit a bit slowly. Now’s the time for them to really dive in,” said Saqib Jawed, partner and the PropTech lead for KPMG’s building, construction and real estate group. “This’ll look different for every company, of course; large companies with deeper pockets will explore technology in different ways than smaller companies will. But, the only way to find what works for your business is to get started.”

All of the Canadian respondents said a specific person was leading the digital transformation, with 67% saying it is a senior employee at the C-suite level. However, only 28% said the digital leader had a technology background outside the industry; 72% came from real estate, strategy, or other industries.

“A digital leader with a technical background from outside the real estate industry can be of immense value to an organization, bringing new perspectives, offering deep expertise, and inspiring a tech mindset throughout the company,” said Krista Thompson, a partner in the building, construction and real estate group.

Just 5% of Canadian real estate firms reported having a well-established data strategy, compared to 25% of global firms. Forty-four percent of Canadian firms (vs 31% globally) said their data was available in silos, and that usage was ad-hoc and team dependent. KPMG recommends integrating data analytics into every part of the business and embedding it in the decision-making process.

Canadian and global CEOs were similarly confident in their cyber readiness, with 70% and 68% respectively saying they feel prepared for a cyberattack. However, 40% of Canadian real estate firms said they had not formally assessed their cyber preparedness, compared to 30% of their global counterparts.