It is no secret that the property and technology sectors have been moving closer and closer together, creating the elusive 'proptech' sector which has become a stalwart in the dictionary of property vocabulary.

According to research from KPMG, a staggering 90 per cent of traditional real estate organisations think that proptech should be seen as a positive opportunity. Coupled with the fact that 31 per cent of investors are actively investing in proptech companies to foster this relationship, according to Deloitte, and it is no surprise that this sector is flourishing.

Neither is it just in the UK that this phenomenon has taken place. Looking wider afield to the continent, over the last few years the sector has really taken off, from a standing start of the financial crisis back in 2009.

Germany, Spain and England have received the lion’s share of capital investment into the sector over the last 12 months, continuing the pace that they have gathered over the last five years. Countries that have, until now, seen smaller quantum of investment, such as Belgium and the Netherlands and also France, are really starting to gather momentum and are most certainly ones to watch.

So where is this investment coming from and what does it mean for the proptech industry?

The origin of investment is largely from international venture capital firms such as Index Ventures and Qualcomm Ventures who see technology as an enabler for a sector that has traditionally been, on the most part, a bit slow to adopt new practices – technology being one of them.

The attraction in this is not only higher returns on buildings which will have enhanced their profile via new technologies but also the growth in opportunity that technology provides which drives the overall market forwards. The way we live and work is changing and we should therefore see proptech as one of the major ways in which we are able to adopt to these changes.

Some recent examples of this include a £4.47 billion injection into Anida, the operator of a real estate platform in Madrid, Spain (the largest in the country’s history); £5 billion investment into South24 AG, a digital marketplace specialising in the real estate and automotive sector in Germany, and finally  £31.1 million into Explore, a French provider of document management and database services.

With 2020 rapidly approaching, it will be interesting to see whether investment into proptech will continue at its current pace and whether we can expect new entrants into the market as investors wake up to the multiple benefits of technology in the real estate sector. 

Further information

Savills Innovation & technology