Hyper-urbanisation fuels Asia’s proptech boom

It is home to over 50% of the world’s megacities. 

Rapid urbanisation in Asia is driving investment in property technology (proptech) companies that develop smart housing solutions, according to analysts. 

“Asia is experiencing unprecedented urban density as it is now home to over 50% of the world's megacities and will account for roughly 60% of all global construction by 2030,” Ariel Shtarkman, co-chair at the Urban Land Institute Asia-Pacific Technology and Innovation Council, told Real Estate Asia. 

But real-estate owners are often reluctant to spend on anything perceived as a “must-have,” she pointed out. “For proptech companies, the biggest hurdle is convincing these owners that their solutions offer an immediate positive return on investment,” she said via Zoom. 

Another challenge is proving local relevance. 

“Singapore's real estate market operates very differently from Japan's, China's, or India's—meaning a solution that scales across the entire region is hard to come by,” said Shtarkman, who is also co-founder and managing partner at Hong Kong-based Undivided Ventures. 

Eli McGeever, director of data and innovation at Jones Lang LaSalle Inc., said a massive, tech-savvy middle class expecting the same digital convenience in finding an apartment as they do for ordering dinner is rising. 

“Many governments are also pushing ‘smart city’ initiatives, essentially rolling out the red carpet for prop technology innovation with funding and supportive policies,” he said in an emailed reply to questions. 

He added that businesses don’t just automate tedious tasks to cut costs and free up staff to do more valuable work. 

“The data gathered also unlocks entirely new revenue streams, including co-living spaces, flexible offices, and monetising all that valuable data they're collecting,” he pointed out. 

The global property technology market is expected to grow 11.8% annually to $103.57b by 2033 from 2023, according to India-based Spherical Insights & Consulting. 

McGeever said companies fear data privacy and security because one major breach could set back trust for years. 

“Lastly, there simply are not enough people who understand real estate and technology, and that gap needs to be filled to keep innovation running,” he said. 

Shtarkman said property companies should view these technologies, especially artificial intelligence (AI), not as a standalone gimmick but as a transformative tool. 

She said the true power of AI in real estate lies in its convergence with other technologies, such as the Internet of Things (IoT) and augmented or virtual reality (AR/VR). 

“When AI is integrated with IoT, it enables the creation of autonomous buildings that can self-regulate energy consumption, optimise interior layouts based on real-time usage, and even predict and preempt maintenance failures,” Shtarkman said. 

McGeever said AR lets a facility manager hold up a tablet and “see” through walls to view wiring, or get step-by-step repair instructions overlaid on a broken piece of equipment. 

“It will create buildings that are truly alive, constantly adapting to the needs of the people inside them,” he added.