Role of PropTech in Streamlining Commercial Real Estate Transactions in India

• With the emergence of proptech—a combination of real estate and technology—the Indian real estate market has seen a remarkable transformation recently. Proptech has completely changed how we purchase, sell, lease, and oversee commercial real estate.
• India recorded a staggering number of 758 million internet users this year. These figures suggest that there is a significant digital presence in the nation and that people are depending on it more and more.  
• Real estate has a commercial stronghold in the country, and is soon projected to contribute roughly 13% to the nation’s GDP.  Since digitization has taken over so many other aspects of our lives, has a sector as important as commercial real estate also been digitized?

Digitization of Real Estate sector in India

• Without a doubt, the answer is yes. According to a recent survey, up to 40% of consumers are now open to making their entire home purchase online. The internet is now the main resource that most prospective homeowners use to start their search due to its growing popularity. 
• The best marketplace for real estate properties is now websites and apps, with less reliance on physical listings.
• When it comes to real estate, Proptech’s rise also played a part in the growing acceptance of online real estate sales.

What is Proptech?

• PropTech is primarily a technology-driven solution that is involved in bringing substantial change in the traditional real estate industry. Despite being in its early stages, the PropTech industry in India has a lot of room to grow. 
• The government’s emphasis on digitization, the rising demand for affordable housing, and the growing usage of technology by the Indian populace as a whole are all factors contributing to the growth of proptech. 
• PropTech has revolutionised the real estate sector by increasing its transparency, efficiency, and accessibility. 

The Role Played by PropTech

• Proptech is the combination of ‘Property’ and ‘Technology’. It refers to the use of technology in a variety of real estate development, marketing, and sales-related areas. 
• The commercial real estate industry has undergone a complete transformation due to the increasing prevalence of Proptech and the rise in the number of PropTech companies.
• According to the  report of KPMG and NAREDCO, the PropTech market in India is expected to grow at a CAGR of 9.6% from 2015 to 2025.

How PropTech is Enabling digitization in Real Estate:

The most important part of the industry’s operations is the sales of real estate. Since sales are the industry’s primary source of income, it is essential that they be conducted as profitably as possible. Proptech helps the industry because it can only be achieved through the adoption of technology at such high productivity levels.

Here’s how PropTech is enabling digitization in real estate:

• Transparency: PropTech has made previously unavailable information more accessible, which has made the Indian real estate market more transparent. It is now simpler for buyers and sellers to obtain information about properties, prices, and amenities because of websites like MagicBricks, 99acres,etc. 
• This has successfully assisted in lowering the number of middlemen that stand between the owners of real estate and those who want to purchase it or invest in the commercial real estate market, whether they be developer-buyer, landlord-tenant, seller-buyer, etc.
• Efficiency: Compared to the traditional system, PropTech has made the purchasing, leasing, and selling of real estate properties easier and more efficient. Property transactions can now be completed in a shorter amount of time and with less effort due to the online marketplaces.
• Cost Savings: PropTech has developed solutions that are affordable for both buyers and sellers. Because online platforms have eliminated the need for middlemen like brokers,  thereby substantially reducing transaction costs for buyers and sellers.
• Investment: PropTech has successfully contributed to the process of making real estate investing more accessible. Crowdfunding platforms allow those who are interested in real estate to invest with as little as INR 10,000 and no upper limit. Through platforms like Assetmonk, investors can invest in the commercial real estate market which was earlier limited to HNIs due to its substantial costs.

Through alternative investment options like Real Estate Structure Debts, investors can invest as little as Rs. 10 Lakhs and earn guaranteed returns of IRR 17%. Sounds great, right?

• Property Management: Emerging PropTech companies and major players in the market, such as MagicBricks, 99Acres and others, are also offering property management services to those who are interested in them. These companies automate a number of tasks, such as collecting rent, paying maintenance bills, returning security deposits, and taking care of other duties that could help with efficient property management.

Assetmonk also  takes Complete responsibility of Product Management for all investments. Expert assistance till exit, Product management and yield distribution is all handled by the firm.

• Financing: Due to the fact that FinTech companies have begun to offer loans to individuals and businesses based on their credit history and credit worthiness, recent PropTech solutions have increased accessibility to financing for real estate development projects for both individuals and small businesses. 

However, real estate analytics is the most important proptech field in India. In order to provide comprehensive details of growth and development in the real estate market, real estate analytics essentially involves going through the available data and statistical analysis pertaining to specific real estate, as needed. 

It can assist developers and real estate investors in making well-informed decisions by giving them data on demand, pricing, and market trends. Additionally, real estate analytics is used to forecast market trends and identify possible investment opportunities.

For example, property managers can use analytics to find ways to cut costs and raise tenant satisfaction, and real estate investors can use these reports to assess a property’s possible Return on Investment (or “ROI”). PropEquity and Anarock are a few of India’s top providers of real estate analytics.

Opportunities for PropTech in India 

• Over the past ten years, India’s real estate market has experienced a surplus of demand due to the country’s growing working middle class, rapid urbanisation, and supportive government policies, including the Smart Cities Mission.
•  As a result, there are now more real estate transactions overall, which has increased the need for effective and transparent procedures, particularly when handling commercial real estate transactions. 
• Efficient property management is one area in India where PropTech can make a big and positive impact. PropTech may be able to provide solutions like property management software, smart locks, and Internet of Things devices to make property management easier in India, given the growth of co-living spaces and rental homes in the country. 
• PropTech can also accomplish this goal by using 3D printing and Augmented Reality (“AR”) technologies to streamline the construction process. The fact that these technologies have already had a significant impact on the gaming and medical industries is noteworthy.
• With all these exciting developments, investor interest in the proptech industry has grown; by 2030, the market is expected to reach USD 1 trillion.

Will Real Estate be a Good Investment in the Future?

• With the outlook for the next five years, now is a good time to invest in the real estate market. The market has a bright future ahead of it, with opportunities for capital gains, favourable regulations, and potential long-term value growth.

• According to a report by Mordor Intelligence, The estimated size of India’s CRE market currently stands at USD 33.62 billion, expected to reach USD 87.57 billion. The growth is expected to continue at a remarkable CAGR of 21.1% during 2023 – 2028. 

• Investor interest is also being drawn by the portfolio diversification, dependability, and outstanding returns commercial real estate investment offers. 

• While real estate remains a solid long-term investment option, wise investing decisions will require careful market research and an awareness of new trends.

Bottom Line

Proptech’s emergence has revolutionised the Indian real estate sector, making it more accessible, efficient, and sustainable. The growing recognition of proptech’s potential to transform the Indian real estate sector is evident in the increasing interest and funding amounts from investors. 

Proptech adoption is expected to increase as digital infrastructure and literacy levels rise in the nation, leading to additional development and innovation in the sector.

Assetmonk is striving to provide smart real estate investment options for the specific needs of investors. For long-term retail investors looking to expand their exposure to the CRE market, Assetmonk’s fractional ownership options offer a high potential earning yield of 14 to 21% annually. 

With just Rs. 25 lakhs investors can invest in the fractional ownership investment options provided by Assetmonk and earn high returns. Start Investing today!!

Reference Links

1. How To Invest 10 Lakhs Rupees For Monthly Income in India
2. The Impact Of Technology On The Commercial Real Estate Industry

FAQs

Q1. How does PropTech benefit investors in commercial real estate?

A. This technology can help real estate agents make more accurate market predictions, which can reduce the risk associated with commercial real estate investing. The potential of machine learning to forecast market trends, rental rates, and property values is one of the major advantages of PropTech.

Q2. What is the future prospect of real estate in India?

A. The five years between 2023 and 2028 are projected to see a growth rate (CAGR) of 9.2% in India’s real estate market. Looking ahead, the Indian real estate market seems to have a bright future filled with continuous expansion and development.

Q3. What are some key PropTech solutions used in India’s commercial real estate market?

A. PropTech Solutions, including artificial intelligence (AI), machine learning (ML), virtual reality (VR), augmented reality (AR), the Internet of things (IoT), blockchain, and 5G, are used in  India’s commercial real estate market.