Our CEO, Andy Miles, gave an interview to Simon Creasey from Property Week on the evolution of proptech.
Property Week: Where did the idea for Realla come from?
Andy Miles: It was 2014 and I was struck by how far behind other industries some aspects of the commercial real estate industry were. As an investment team at British Land, we were introduced to up to 100 deals a week – nearly all via paper or PDF brochures. That is an extremely inefficient and expensive way of marketing. At the same time, Ian was reflecting on his Globrix experience and thinking "the commercial portal market is really poor quality and fragmented – just like [the residential market was] when we started Globrix". He thought there was an opportunity there and, crucially, had the experience and team to execute it. We met, and decided to put the two ideas together. We decided we could trust each other and had complementary skills and networks. After six months of working on a business plan together, we took the leap full time.
PW: What products do you offer and how do they work?
AM: Realla has two products: a software platform called Realbase specialising in digital property marketing and transaction management, and we also have a free-to-list search engine for commercial property for enquiry generation. The aim of the business is to raise the standard of online marketing, tracking and transaction management for customers. This is very important for traditional agents and landlords as the serviced office sector is so far ahead in this respect, and in some ways crowding out the traditional market.
PW: What's the company's USP?
AM: Our product is an end-to-end solution. This means you can buy it for a large portfolio – even 1,000 properties – and we will fulfil the entire digital marketing requirement from beginning to end. This means property websites, search, email and PDF automation, syndication to portals and full tracking and lead attribution. The only extra piece you may wish to buy that we don't do is fancy brochures to create an impressive 'thud' on the desk when marketing very large buildings. There are other products that do bits of what we do or that aren't built specifically for commercial real estate, and are therefore poor to use. Our solution does not go 'deep' into landlord portfolio management like Coyote or MRI or VTS do, and we do not sell it as such.
PW: How many users do you have and what sort of companies use the product?
AM: We have more than 70 subscriptions from agent and landlord clients. This includes seven of the top 10 agencies by revenue including BNP Paribas, Colliers, JLL, CBRE and Savills, as well as institutional landlords such as Grosvenor, LaSalle, Derwent and Stenprop. We are very proud of our smaller customers, too – from Union Street Partners to small private equity firms. Turning to the portal, there are more than 100,000 tenant and investor users of the portal every month and it generates several thousand enquiries.
PW: How do your customers use your products and what are the key benefits?
AM: For our agent and landlord customers, the principal benefits are: huge efficiency gains through automating tasks such as marketing and matching requirements and interest scheduling; enquiry generation – through our portal and syndication to other portals; transparency – through total enquiry attribution from all channels; and brand-consistent, high-quality digital representation.
PW: What sort of payment model do you use?
AM: It's quite simple. For agents, we charge per seat [individual user] per month. For landlords, we charge per available building. There are sometimes extra charges for data uploads and/or integrations, for instance with products such as Salesforce or Microsoft Dynamics.
PW: What was the thinking behind the launch of Realbase last year?
AM: We want to separate the portal brand – which is becoming a tenant-facing brand for enquiry generation – from Realbase, which is a comprehensive enterprise product to help landlords and agents with all aspects of marketing.
PW: Why did you do the tie-up with Coyote earlier this year?
AM: Both Oli [Farago, chief executive of Coyote] and I believe in working together for the mutual benefit of clients.We thought that by working together we could create a '1+1=3' situation for clients, which of course in turn would benefit us. We are doing something quite exciting with one client in particular that we hope to make a real 'flagship' for what we both can offer. The company itself is particularly innovative within the traditional property sphere; they are great entrepreneurs. I look forward to discussing this further down the line. We also integrate tightly – when clients request it – with Zoopla, Rightmove, NovaLoca and Propertylink.
PW: What do you make of the recent rapid growth of the proptech sector in the UK?
AM: I think it's a huge positive for the industry but we must remember this is a process not an event. This year is not the year of proptech; that is a weak statement with no nuance. However, 2015 to 2025 is the decade of proptech within commercial real estate for sure.
PW: Do you think there will be further M&A activity within the proptech sector in the future?
AM: Absolutely, but in the UK it will be gradual at first, then potentially accelerate. MRI/Qube was a big deal. Some new businesses have already shut down – Property.Works, for example – which was another portal set up about the same time as us. Some other entrepreneurs have decided it's better to join big established companies rather than continue alone.
PW: Do you think traditional property businesses truly understand many of the proptech businesses out there and are they starting to properly engage?
AM: I would reiterate that it's a process not an event, but this process is massively under way. We have contracts and/or exciting dialogues with many big businesses when, two years ago, we could not even get a meeting. Many of these companies are becoming much smarter with respect to technology, and are really educating themselves or hiring in the skillsets required.
PW: What are the biggest challenges the proptech sector faces going forward?
AM: Because of the still relatively early stage of the proptech industry within UK commercial real estate, customer inertia is a bigger challenge than competition. I also have two major concerns. The first is excessive hyperbole within proptech, which massively turns off or bores the wider property industry. If you preach about changing the world and don't deliver, people stop listening. There is so much work to be done getting the basics right: better data management; efficiency; better digital marketing etc. Forget about artificial intelligence and cryptocurrency for now. You can call me boring or lacking in vision for saying this, and I'll accept it.The second concern is the industry must see technology as the opportunity not the threat. The most innovative businesses such as WeWork and Instant use technology ruthlessly as an opportunity. To paraphrase Lionel Hill [chief digital and technology officer at CBRE], with whom I was on a panel this week: "Our business is very diversified, but in the areas where we can apply tech to automate processes – like for smaller lettings – we will." In my opinion, that's a great attitude to take.