LISTED PROPERTY firms are joining in the digital transformation by expanding their investment in developing their own technologies to meet the demands of the customers of their residential projects.
Property firms have since 2017 launched joint ventures with venture capitalists to develop “proptech”.
Sansiri Plc and Ananda Development Plc were the first two local property firms to introduce proptech venture capital to expand their investment in startups, as they sought their own technologies to serve customer demand.
Other property firms then launched a new business model, expanding their investments in startups to develop innovations that serve their business. Though companies call use various labels for the new approach, the main idea is develop applications that provide additional services to serve their customer’s demands. The services are offered to their customers after the residential projects are transferred to them. This also creates a source of recurring income for the property firms.
“We believe in technology that changes the way to do our business,” said Sansiri Plc’s president Srettha Thavisin in an earlier interview with The Nation. “Although the main factor in being a property developer is to develop quality residential for our customers, we also have to provide more after-sale services for our customers. [That’s ] because their residence is not only a building, it is our customer’s life.”
With the digital disruption of all business sectors, Srettha believed saw the potential to use digital in its business by creating a new business model. It would use digital to facilitate its buildings, and in the process differentiate the company from other property firms in its market.
Thus Sansiri Ventures Co Ltd, a joint venture firm between Sansiri Plc and Siam Commercial Bank, was established in 2017 to expand investment in startup businesses in order to develop technology to serve the property industry.
Since then, Siri Ventures Co Ltd has invested Bt300 million in startup businesses in both Thailand and overseas, and plans to spend another Bt600 million in 2019. This is apart of its three-year plan to invest Bt1.5 billion between 2017 and 2020.
Jirapat Janjerrdsak, chief technology officer at Siri Ventures, says the company plans to invest the Bt600 million in six startups next year. The firm will also explore a new Asean ecosystem partnership targeting Singapore by optimising local engagement in order to create sustainable partnerships.
The firm will set up the Siri Ventures Private PropTech Sandbox in order to provide various aids, including mentorship and insight from various business units, grants, lab rooms, networking opportunities and smart devices. It will also provide a co-working space to support startups in the areas of PropTech, living tech, ConTech, health and wellness tech and sustainability next year.
The firm moreover will utilise technology and develop innovations and solutions to support good health and well-being designed for an ageing society, green energy, sustainable cities and communities, and climate action. The aim is to create benefits for Sansiri’s customers and investors.
For its part, Ananda Development Plc has created Ananda Urban Tech to expand its investment in startups and innovative businesses. Chanond Ruangkritya, the company’s CEO, believes that the next step for a property developer is as a service provider, finding the services that match with customer demand and meet the needs of different lifestyles.
“Technological advancement will gather speed in the next five to 10 years, and will play a greater role in revolutionsing many aspects of the property industry from the construction process to the enhancement of urban living,” said Chanond.
“The company will keep adjusting to keep pace with technological disruption.”
Last year, Ananda announced a plan to become an UrbanTech company as part of its strategy to deliver urban living solutions to customers, he said in an earlier interview. It has also partnered with promising tech startups to provide innovative services to its condominium customers.
Meanwhile, Origin Property Plc has also set up Primo Service Solution Co Ltd, an arm for investment and collaborate with startup as the company develops its “digital butler service” and others applications, along with artificial intelligence to serve its customers. It also wants to provide the service to other property firms.
“We believe in innovations and technology that will change the business model of property firms from property development to providing services offering smart living solutions,” said Origin’s chief executive Peerapong Jaroon-Ek in a recent interview with The Nation.
“Investment in technology – that is the way to create our differentiation from other property firms in the market.”
SC Asset Corporation has established a new investment arm for startups and technology. Called SC Urban Co Ltd, it has invested in Fixzy Co, a startup firm that provides home renovation and repair services through the “Fixzy” application.
“Our business strategy is to be the living-solution provider,” said SC Asset’s CEO, Nuttaphong Kunakornwong, recently. “As a result, we established a proptech firm, SC Urban Co Ltd, for investments or joint ventures with startups to develop technology and applications to service our customers after they have bought our residential projects.”
Like Peerapong at Origin, Nuttaphong sees technology as the means to create services that differentiate the company from its competitors.
“We will also l allocate a 1,500-square-metre space on the 14th floor of Shinawatra Tower Three as a co-working centre for application development and big-data management, aimed at creating innovative products to meet the demands of homebuyers,” Nuttaphong said. The co-working centre will open in the first half of next year.
He added that SC’s business landscape would change to ensure sustainable growth, and investments in research and development and innovations and technology would drive that change.
“SC will become a ‘living solutions provider’ to blend innovations with our residential projects in response to the evolving lifestyle of residents now and in the future.”
Anthony Couse, CEO of JLL Asia Pacific, noted that though real-estate had been viewed as a traditional business, the time was right to embrace technology, digitisation and collaboration.
“We’re taking an agile approach to technology that will allow us to meet our clients’ needs today while preparing for the opportunities of tomorrow,” he said.
“We believe in big corporations being part of the larger tech ecosystem, engaging with the startup scene and academic researchers, and learning from entrepreneurs and innovators,” said Couse.
“Proptech is an opportunity for us all to work together, and that’s really exciting.” Proptech has been described as a burgeoning new sector whereby technology solutions are used to solve real-estate problems.