It has been sometime since we commented on technology in property, since then it has even been assigned its own nick name Proptech which is in danger of becoming over used by certain sections of the media!
Proptech has come a long way over the past few years and is changing the face of the property industry in many ways although many property professionals probably dont even notice or recognise it.
One area that is starting to be affected by technology and is central to the property industry is valuation, both from the perspective of residential and commercial standpoints. Our focus is commercial and thats what this blog is about.
Many online discussion threads about valuation technology in property are pretty polarised from surveyors who think that their job is secure, that technology will never be able to cover all the small decisions that go into a valuation, to the surveyors who suspect that a valuers job is coming to an end.
The answer I suspect, as with most of these discussions, is somewhere in the middle. A recent podcast released by Estates Gazette, a round table discussion by various valuation experts, discussed the issue of technology in valuation. The head of a major fund admitted that they are already using Automated Valuation Models (AVMs) to value their portfolios and that they were frighteningly accurate. If a major fund has already automated this process it shouldnt take long before this is happening across the board right? The caveat to the above comments was that these AVMs work well on portfolios because of the level of detail required, generally looking at market movements. The expert admitted that they werent yet sophisticated enough to handle accurate valuations of individual properties.
Commercial valuations need a great deal of input from floor areas, comparable rents, comparable yields through to decisions on how, as a valuer, you should be adjusting all these bits of information to suit the subject property. In some cases these rents might then need to be adjusted to take into account management fees or capital works to the property, something that would a piece of technology wouldnt necessarily be able to know was necessary and even then be able to judge what was required.
So case closed? Not really!
We use software in our valuations having moved on from the hand written calculations we had relied upon for so long. Why did we change? Partly because we needed to keep pace with the opposition but also because we recognised some of the benefits, having done so though the benefits are many:
1. Easy Access to Past Valuations
Each valuation is held in the database so a quick review of rents and yields as well as floor areas takes a couple of seconds rather than a trip to the archive to pull out that file that has become a bit damp and smelly. That means we can provide quick advice to our clients on their subsequent queries.
2. Ease of Revaluation
We are often called in to revalue properties, we can effectively just roll a valuation forward, copy the old one and then edit to suit any changes. This takes moments rather than hours particular for complex multi let properties with all lease dates being taken into account. Past and present valuations can then be compared, providing the client with proper data to make decisions upon.
3. Hypothetical Scenarios
A client asked me the other day what would happen if the coffee shop that was part of a multi let site was closed and put to a different use, how would that affect the value. Without affecting the underlying data I ran a quick scenario to change the assumptions and within 5 minutes had an answer for them. They were very impressed.
Now all of these benefits are not things that couldnt be done under a manual system but that isnt the point, I have been able to spend less time on jobs and provide better advice to my clients and this is the nub of it. As I have said before technology will allow us, as surveyors, to work more efficiently and effectively. Maybe we will see more systems incorporating AVMs within them which may well need human input but I suspect with the prevalence of Artificial Intelligence these systems will start to learn from the human inputs and be able to make their own decisions at some point, they will still need checking by an appropriately qualified person though.
The surveyors who embrace the technology will be the ones who will be able to take on and complete more jobs, perhaps provide better value for money and provide their clients with quicker results that their counterpart who insists it will never happen.
The next question is how do we use technology to present better information to our clients.