Author: Louis Juste
Only launched last February, LuxPropTech has already established itself as the bridge between the real estate sector and PropTech startups and scaleups. President Laurent Rouach shares his thoughts on Luxembourg’s rising PropTech sector, its future and the challenges he’s encountered as the President of LuxPropTech.
Photo: Laurent Rouach, President of LuxPropTech / Image Credits: Kaori Anne Jolliffe / Silicon Luxembourg
How would you define PropTech?
According to our definition, PropTech includes all innovations (i.e. technological, technical or business model) in the commercial real estate value chain for all asset classes (e.g. residential, office, logistics, etc.). Investment in PropTech is growing at the fastest pace out of all the sectors combined. It is slowly but surely reshaping the largest asset class in the world.
What motivated you to launch LuxPropTech?
Although the Luxembourg real estate industry has always played a major role in our economy, PropTech actors were scattered. The motivation to federate this ecosystem emerged which led us to launch LuxPropTech last February.
Today, our association has brought together about 50 PropTech startups out of the 75 in the country, about 20 corporates and 6 sponsors (atHome, BIL, Bâloise, Besix Red, Deloitte and PwC), and about 10 individual members or investors.
The Luxembourgish PropTech startups are categorized based on the 5 pillars that cover the life cycle of an asset. The 75 Luxembourg-based PropTech startups are found in the following categories:
– 6 in Financing and Investment (investment and financing phase) – 14 in Design and Construction (building design, construction execution, and delivery) – 33 in Marketing and Transaction – 12 in Management and Operation (asset, property and facility management) – 10 in User Experience (new technology or that impacts the end-user experience)
“Big real estate players are sometimes less motivated to adopt radical innovation.”
What are LuxPropTech’s goals?
At its inception, LuxPropTech had 3 objectives. The first was to bring together the two worlds of startups and corporates. To create this meeting space, a dozen events have been organized, the PropTech Breakfasts during which 7 or 8 speakers dealt with a different themes related to PropTech.
The second objective was to introduce new PropTech trends that were not yet present in Luxembourg. Foreign startups at the forefront of certain fields were therefore been invited to pitch during the PropTech Breakfast sessions.
The third objective was to make the Luxembourg PropTech players known on the European scene. The European PropTech awards – organized by the European PropTech Association – allowed some local PropTech to rub shoulders with their peers and have their deck analysed by a jury of about 80 qualified people.
Although our work seems to have borne fruit, we are encountering certain limits. There is a need for a stronger presence than webinars and requests for support and assistance were notified by both startup companies and corporates.
However, the association being only composed of volunteers is not able to respond in the most appropriate manner. For this reason, our LuxPropTech board is thinking of adapting its structure to meet these demands. Its vocation is to participate in the deployment of innovation.
What is the biggest challenge you have encountered as the President of LuxPropTech?
In Luxembourg, we already have various organizations related to the real estate industry. To make room was our first challenge but we have been encouraged during the entire process and received supported from influential actors such as the City of Luxembourg, the government, research organizations (LIST, LISER…) and recognized real estate players.
Another challenge was putting the Luxembourg PropTech sector on the European map. As our market is small, our champions need to be present at the European level. Since this environment is extremely fragmented (legislation, language), achieving this was no easy task.
“As our market is small, our champions need to be present at the European level.”
With this in mind, we joined the European PropTech Association, an alliance which, with the support of the European Commission, organises the annual European Proptech Startups and Scale-ups Awards. Four Luxembourgish PropTech startups were competing in 2020 (out of 220 applications from all over Europe) and one of them reached the final. Such competition with a large audience is extremely stimulating and gives visibility to the Grand-Duchy.
A last challenge is the perverse effect of our extremely dynamic local real estate market. Big real estate players are sometimes less motivated to adopt radical innovation. To attract them to our event was not taken for granted.
What are the big trends in Luxembourg’s PropTech sector?
Trends usually differ by country, but a common one is the impact of Covid-19. The use of electronic signatures and virtual visits have surged (use of Matterport by several brokers) and sales and document management platforms are gaining traction (e.g. Ziggu and kodehyve confirmed this trend with their recent successful fundraising).
The new standard of remote working and the emergence of flex offices were eased by PropTech’s dynamic management of workstations or meeting rooms (Jooxter). Furthermore, the pandemic, which has led to increased awareness of sanitary aspects, has favoured PropTechs that focus on sensors – indoor air quality and other parameters – (Sensilla) or the fine control of technical equipment (Foobot, Symvio, etc.).
Besides, the emergence of Building Information Modeling (BIM) in Luxembourg triggered a momentum for startups specialized in this field. The successful fundraising of GAMMA AR perfectly illustrates this trend.
Lastly, there is also the rise of startups that are tackling the transaction market with the blockchain asset tokenisation (Digibrixx, BlocHome, Estate Share, etc.). The fact that the Grand Duchy is making laws in this field will facilitate the maturity of this market.
“Mastering the technologies such as Big Data and Artificial Intelligence, IoT and Blockchain would be a key success factor in the next decade.”
What kind of PropTech startups do you expect to grow the most in the next decade? Why?
Firstly, PropTech startups tackling climate change. Discussions about ESGs and the environmental impact of businesses are becoming increasingly critical discussion points in corporate strategy. I think that in the future PropTech startups will seek to leverage technologies such as AI and IoT to increase sustainability in many areas – energy consumption (AI driven), emissions, water cycle, air quality (sensors), health risks and contact reduction (touchless, voice control).
Secondly, PropTech startups focusing on the tenant experience or Space-as-a-service. Attracting and retaining tenants is becoming a challenge and PropTech will play a key role in solving these issues. PropTech can transform the user experience contributing to a better flow of information, foster community and provide access to all services offered within a building and beyond (catering, mobility, groceries etc.). These tools should connect technology, community, internal and external services and the building ecosystem: From access to room or office reservations, from fine-tuned equipment control to parking or shared and public transportation booking, the possibilities are endless.
Thirdly, PropTech startups based on Immersive AR/VR technology. These have already found a huge field of application in the real estate industry. Whether for real estate agents or buyers, it is an obvious technology, including developments in collaboration with architects. And the use of VR can go much further: In the field of underground networks, for example, many errors or accidents can be avoided by using augmented reality (Syslor). The visualisation of digital models directly on the construction site also reduces the risk of non-compliance (GAMMA AR).
Lastly, PropTech startups aiming to fully digitalize transactions. From customer acquisition and property marketing using virtual tools to digital signatures, interactions with banks and land administration authorities, dedicated platforms would enable ultra-speed end-to-end digital transactions. Moreover, thanks to Blockchain technologies, companies will be increasingly able to ensure security and transparency.
I also believe that mastering the technologies such as Big Data and Artificial Intelligence, IoT and Blockchain would be a key success factor in the next decade.
Article courtesy of our content partner site Silicon Luxembourg