Why digital leaders are succeeding: The Corona effect
At the property level of real estate, portfolio managers interested in making meaningful transactions and acquisitions during a worldwide pandemic must rely on the digital options that are available to them. In March 2020, global real estate companies continued to make acquisitions and sales, particularly with real estate prices at historical lows in many markets as widespread economic retraction opened new opportunities for previously unavailable properties.
Succeeding in times of crisis
Only the companies that already had the digital tools implemented (for everything from video-conferencing to on-site viewing to cryptocurrency transactions) were able to make successful acquisitions.A handful of Asian multinational real estate firms — with customers from Japan to South Korea to China but also in North America and Europe — were each able to secure upwards in USD 500m in property sales in March 2020 thanks to having digital transactional systems already in place.There is no question that the number of remote, online real estate transactions will accelerate in coming years. Presently, only a tiny 8% of the world’s currency exists in physical cash. The rest is digital.
The chance to drive transformation
More property owners are realizing that real estate assets are digital assets because the ownership of the asset is already digitized. Paperwork is almost fully digitized. From viewing to negotiation to verification to payment, there is virtually no part of a real estate transaction that cannot be performed digitally.The impact of a black swan event like COVID-19, an unexpected macro event that changes the course of history, can scarcely be overestimated. Its effects on all aspects of society, culture, governance and commerce are happening now with humanity having been forced into new ways of living and interacting.Digital methods have, in large part, enabled societal and commercial transactions to continue while keeping the humanitarian requirements of social distancing intact.One would hope that useful lessons will have been learned by all participants in the real estate world: digital is the way of mutual benefit for all, in terms of health, well-being and overall efficiency.
Learning from digital leaders
Real estate professionals and asset managers who have experienced the unexpected benefits of forced digital transition are unlikely to go back. Market players who were already digital-first will have seen a watershed moment in their businesses, having not only survived, but thrived, over a period of great uncertainty.There is no going back, and, as employers, employees and asset managers alike realize, digital-forward offers so much more.