Kylie Davis: (00:01)
Welcome to the Proptech Podcast. It's Kylie Davis here, and I'm delighted to be your host as we explore the brave new world where technology and real estate collide. I passionately believe we need to create and grow a sense of community between the innovators and real estate agents, and sharing our stories is a great way to do that.
Kylie Davis: (00:19)
Now the aim of each episode is to introduce listeners to a proptech innovator who is pushing the boundaries of what's possible, and to explore the issues and challenges raised by the tech and how they can create amazing property experiences.
Kylie Davis: (00:34)
Now this episode is another one that looks at better ways of transacting commercial real estate. My guest in this episode is Simon Hayes from LeaseSearch. Now one of the big issues with commercial real estate, especially in the industrial and big office leases, is that it's hard to compare apples with apples. Unlike residential, where a three bedroom home is going to be pretty easy to compare to other three bedroom homes in the suburb, the variations in commercial can be extensive, and the value of the different features or compromises are hard to compare and put a value on. Lease negotiation therefore can be complicated, including large spreadsheets of features and lease terms.
Kylie Davis: (01:17)
Now LeaseSearch makes all of that easy. It helps tenants identify the features they really need a property to have, and it connects tenants with landlords of suitable properties. It then speeds up the leasing process, ensuring all property and financial issues are covered, and saves time for everyone involved.
Kylie Davis: (01:35)
So here to tell us all about it, Simon Hayes. Welcome to the Proptech Podcast.
Simon Hayes: (01:40)
Hi, Kylie. How are you going today?
Kylie Davis: (01:41)
Good. Great to have you on the show.
Simon Hayes: (01:43)
I've been looking forward to this for weeks.
Kylie Davis: (01:45)
I know. I've been promising it to you for ages, haven't I? I've been a bit of a tease. So, Simon, when we interview you on the Proptech Podcast, we always start with your elevator pitch. So tell me what the elevator pitch is for LeaseSearch.
Simon Hayes: (02:00)
So LeaseSearch is a tool for tenants to search and negotiate and lease office and warehouse space. Essentially, the benefit of using LeaseSearch is it provides a workflow and document management tool that allows tenants to go through a process, which is a convoluted process, and I'm sure we can get into that a bit later, but essentially going through that process, it will save them, essentially, days, and weeks sometimes, of the process of finding space, identifying space, identifying the options, evaluating those options, and doing all those things necessary to negotiate it.
Kylie Davis: (02:45)
So my background is more in the residential space. So why is it so difficult? What makes it more difficult in commercial than it does in residential?
Simon Hayes: (02:56)
Yeah, yeah, no, that's true. I suppose it gets down to what is the problem solved and where does it all come from, and if I can maybe go into that a little because-
Kylie Davis: (03:05)
Simon Hayes: (03:08)
People that work in the commercial industry, or the commercial property area, probably understand it, but I think a lot of other people don't, don't have that sort of background. Essentially, when you're leasing a space, obviously the tenant who's looking for it, or their representative, then first goes and thinks about, "Okay, well, how much space do I need? Where do I need it? Where do I want the location? What's the building requirements?" For an industrial space, you could have a number of docks, or how big the size of the yard is, or the height of the eaves. For an office building, you're looking at four plate sizes, number of lifts, lift speeds, performance of air conditioning. So all these sorts of things come into play.
Simon Hayes: (03:55)
So there's a bit about deciding exactly what you want. Then you're going through that search and trying to identify all those options that you'd like to look that. So identify what's out there, but then obviously narrowing down those options to then go do some inspections. Then you go through the process of negotiating your lease proposal which is received from the landlord. So that all takes-
Kylie Davis: (04:27)
So I imagine in commercial and industrial, it is a bit hard to compare apples with apples, in terms of one property to another. Is that part of the issue?
Simon Hayes: (04:36)
Well, it is, it is.
Kylie Davis: (04:38)
That it's hard to find properties that are identical? It's not like just a two bedroom unit with a nice living area, you're getting down to dock spaces and-
Simon Hayes: (04:47)
Dock spaces, yeah. That is true. That is some of the difficulty. There's also the difficulty around making sure that you've got all the information because I know that when people do searches, say... and generally the normal process is that someone would look on realcommercial and identify a spot, and then they'd ring that agent and that agent would show them some of the properties that are available, and maybe some more as well, but they might not be all the places available on the market, and not all that's available on the market are on realcommercial anyway.
Simon Hayes: (05:20)
So by being able to tap into all the possible agents and landlords, that allows them to identify all the options that are available for them.
Kylie Davis: (05:33)
Simon Hayes: (05:33)
Then basically then there's a whole process which needs to go... of the back and forward between receiving the information, identifying or evaluating those options, and then going through that process of going backwards and forwards. You might go backwards and forwards with a couple of options in negotiations. As you can imagine, it's done now via emails, telephone calls, all these sorts of things, documents, Word documents and all those sorts of things.
Simon Hayes: (06:00)
So I should say where I have worked previously, and still have an involvement, is a tenant representative company called Property Beyond, but that company does this every day. I suppose where LeaseSearch was born out of was a complete frustration about the tediousness and the convolution of such a process that we go through, and we were looking for some tool or some answer to making it simple and easy.
Simon Hayes: (06:32)
So by using the tool, we've been able to cut down days of time for our people in using this process, and also then organising all the information in the one location, and then also being able to share it with clients, or you can share it internally with the boss.
Kylie Davis: (06:52)
So I imagine before this existed, there were just monster spreadsheets of trying to break down all the different features and comparables so that you could work out what you were comparing things to, yeah?
Simon Hayes: (07:04)
Yeah. There was monster spreadsheets. There's monster emails because... sorry, email lists. We saw someone had done one just recently in the office, in Property Beyond's office. They received 54 responses to a search for a small industrial premises in the South and Inner West of Sydney. So trying to manage all those emails that come through, and trying to manage all the detail in those, is always quite a difficult thing, and especially if you're just a tenant, like you're doing it yourself.
Kylie Davis: (07:46)
Yes, I can imagine. I can imagine. Okay. So I love how much technology is coming through and being developed at the moment, that is replacing both the humble spreadsheet and the humble whiteboard.
Simon Hayes: (07:58)
It is, yes.
Kylie Davis: (08:03)
And the filing cabinet. They seem to be the three things that need to be burned at the stake.
Simon Hayes: (08:11)
I think property technology, and you've got a great background in it as well and have a great understanding, but I think property in general, the property industry, is looking at technology that's... especially in the transactions area, is looking at just replacing it. It's making a digitization of the process at the moment. It's taking it, as you said, taking it off the spreadsheets, taking it off the whiteboards and making it into digitization. I think you'll then see the next... what you'd call the next phase of that will be changing the way it's done. Because people are now comfortable with the way it's done, and you can't change them too quickly, I guess.
Kylie Davis: (08:53)
Simon Hayes: (08:53)
Especially in the property industry. No doubt you've met some of the characters in the property industry?
Kylie Davis: (09:00)
We build it to last!
Simon Hayes: (09:01)
Yes. They don't like to change too quickly.
Kylie Davis: (09:04)
Simon Hayes: (09:04)
So, anyway. So I think, as you can appreciate, the next phase will be, post this sort of digitization of the processes, then we'll start to see changes of the actual process itself.
Kylie Davis: (09:17)
Okay. Cool. So LeaseSearch started... you just were starting to tell the story just before, that it started inside your business, as a way of you guys capturing the information and doing it a bit smarter. Tell us a little bit more about the story behind it starting.
Simon Hayes: (09:42)
I think it was myself and the other director were sitting there, probably at about 8:00 P.M. one night, and going through bits and pieces of information and talking about one of the jobs that we were doing. We just basically said, "This has got to be an easier way of doing it." Hence, that's where the idea came from, and we started to work on that idea. Unfortunately, as with... no doubt many people can attest to this, is if you have a day job and a side project, the side project tends to get put on the side for quite a while and done at a very piecemeal rate.
Simon Hayes: (10:21)
So we've been working on it for about five or six years now. Had about three re-designs, trying to get the flow right. It's not the data or the information which is the hardest part, it's actually just getting the flow right because, as you may appreciate, that a lease transaction, there's so many variables and so many [crosstalk 00:10:49] in different ways that you're trying to build that flexibility into a flow.
Kylie Davis: (10:54)
I guess with each of those variables, there's an impact that can be part of the negotiation as a result of those variables. So if property A has six loading docks but property B has... and is, I don't know, 1,000 square metres, but property B has four loading docks but is 1,200 square metres, you have to kind of make a value call on which one's worth the more rent, don't you, I guess?
Simon Hayes: (11:26)
Yeah, yeah. And also, you may only want 1,000 square metres but you might not need as many docks. There's always gives and takes. Especially with the workflow, I suppose we're getting at is the ability to be able to... what's the best way to put it? There's so many things that you could go in each direction. It's like saying, "I'll put this one on hold for a bit and I'll negotiate this one, but I'll bring this one back in, and then I'll try it. But maybe I'm going to ditch that one now and bring this one back on, and I'll start talking to that one again because I want to go and speak to that one again because I think I like that one better now."
Kylie Davis: (12:11)
Simon Hayes: (12:11)
There's that sort of flexibility where people change their mind as they go through, and that's quite okay, that's completely normal in any process, but building that flexibility into workflow rather than just pure rigidity is a difficult thing. If you're just signing up to a form, that's pretty [crosstalk 00:12:31]
Kylie Davis: (12:30)
Simon Hayes: (12:33)
Sorry, just the one thing. It also adds a complication because LeaseSearch is two-sided. So there's the tenant side and then there's the landlord and agent side. So building that integration where both sides talk to each other is always a difficult thing, and building flexibility into that as well.
Kylie Davis: (12:51)
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Kylie Davis: (12:54)
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Kylie Davis: (13:20)
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Kylie Davis: (14:01)
So just so I'm clear, the process using LeaseSearch is that I would go online to a portal or I would look for a commercial space the way I normally would on a portal, and then once I've started to draw up a shortlist, I start to use LeaseSearch to help me sort and negotiate and manage the step after that? Is that how it works?
Simon Hayes: (14:29)
Well, actually what we're... so there's-
Kylie Davis: (14:30)
Are you replacing the portals?
Simon Hayes: (14:32)
No, we're not replacing the advertising portals, but what we're doing is... it is basically saying... If I want to search for everything, I go to LeaseSearch, I just type in my requirements, and it will keep all those registered agents and landlords on LeaseSearch and they will be able to respond to me with [crosstalk 00:14:55]
Kylie Davis: (14:54)
Oh, so it's like a concierge almost.
Simon Hayes: (14:58)
Mm-hmm (affirmative). Again, it's an intermediary, but we're going further than just an introduction service. It's actually then taking people through, assisting them with preparing their requirements, then allowing the landlords and agents to respond and assist, and then allowing you to look at those and evaluate those and share it with whoever, and then take that to the next step and ask for lease proposals, and then negotiate the lease proposals. So it goes all the way through to signing and committing to a piece of property.
Kylie Davis: (15:35)
Okay. So is it pulling out unstructured data and making it structured at any point, or is it-
Simon Hayes: (15:43)
Yeah. So especially there's that big sort of tedious effort that once you receive, say, 30 responses or 50 responses or whatever-
Kylie Davis: (15:54)
Yes. And you're spoiled for choice.
Simon Hayes: (15:59)
It does. So at the press of a button it will produce an Excel spreadsheet for you which will then... obviously you can look at this Excel spreadsheet, and basically it pulls all the fields that have been responded to on the landlord or agent side, and it creates those into a nice little spreadsheet where you can then sort your options by. Obviously it's a start-up, so that's the tool right now, but we'll be looking to improve on that tool as time goes by. So then it allows people then to sort of evaluate those from that point of view, and then decide on which ones they really want to go and inspect.
Kylie Davis: (16:51)
Yes. Okay, cool. Well, look, spreadsheets are extremely useful tools. So the benefits are that you get an overall view on all of the different elements of the properties that you're looking at. It's going to help you connect and find properties and make that a lot easier, and then once you've found suitable properties, it gives you the insights that you need to help you negotiate your lease contract more easily.
Simon Hayes: (17:26)
Certainly once you get to that pointy-end of starting to say, "Okay, there's about three here that we want to get down and start looking at, in terms of the nitty-gritty of the detail, in terms of negotiation," it goes into more of a document management system. As you'll appreciate, the landlord or the agent may hand you a lease proposal-
Kylie Davis: (17:47)
The size of a small phone book!
Simon Hayes: (17:49)
The size of a small phone book, yes, that's exactly right. Then you'll be able to respond to that. Often there's the case that you'll read that and you'll mark it up. Then basically the system allows you to load those marked-up versions, or the next version, the reiteration version, on the system, and then other documentation which you want to load onto the system as well, as part of the deal. Then it basically gives a time, a stamp and a... a timestamp and a date upon which those documents are loaded up.
Simon Hayes: (18:28)
Often there's that classic, "Oh, sorry, I didn't see your email. Oh, sorry about that." Or, "I didn't get that. I didn't get that one." Or you always get confused sometimes in a negotiation, and it may be for a considerable amount of money, where you find that you've changed something and then someone changed it back to the way they wanted it but you don't [crosstalk 00:18:49]
Kylie Davis: (18:49)
Oh, yes. That old legal trick! The, "Oh, yeah, we're not improving that change to undo."
Simon Hayes: (18:58)
So at least then you can start to track, and you say, "I'm sure I made that change somewhere. Where's that document?" and all you need to do is flick up... like it's right there in front of you. So you can just follow those. As I said, it's a good document management control for that reason, until you get to the point where you're ready to sign.
Kylie Davis: (19:14)
Fantastic. So what's your background, Simon? Now you're a lawyer by background, I know this because we have history. Tell us a little bit about that.
Simon Hayes: (19:26)
Yeah. Look, I was a lawyer, a project manager, a development manager. Then I worked at a small asset soliciting company as the COO and the company secretary. Then I went into the business with some other people in order to be doing more property consultant work, and basically we just help organisations with determining their requirements and then going and delivering on those requirements. This, essentially, is one of those things where, okay, how can we help people work out what space they want and then find their space? I should say too, and this is probably one of the questions that you'd love to know, is how big is this market, in a way?
Kylie Davis: (20:16)
Yeah, I would.
Simon Hayes: (20:17)
How big is the leasing market? That sort of arises the problem where I was saying many of the transactions that occur we don't ever see, and a lot of transactions are done by people by themselves. It's a difficult, what do you call it, a statistic to find, but we think about 80% to 90% of all transactions are done under 1,000 square metres. That's for office transactions. Leaving aside industrial for the moment. Of those, we think, on the information that you can possibly gather, and I'll explain why, we think there's about 2,000 to 2,500 lease transactions in CBDs around Australia each year, 2,000 to 2,500. But maybe 2,500 is probably... probably at the higher end of 2,500.
Simon Hayes: (21:09)
Difficult information to come by because, as you'd appreciate, it varies depending on... because if you have 1,000 square metres, you can have four leases over 1,000 square metres, or you could have one lease over 1,000 square metres.
Kylie Davis: (21:20)
Simon Hayes: (21:22)
Then all leases have various terms and plans, could be one year, three years, five years, 10 years. So it's all very hard. Based on that number of, say... and just talking about office lease transactions... based on that number that occurs, then you're looking at the commissions that are paid as compared to the... and the market rents that are being offered. The leasing market of commissions within Australia looks to be between 200 to 250 million a year.
Kylie Davis: (22:00)
Simon Hayes: (22:02)
So, look, it's not huge, as in terms of other markets out there, but there is still plenty of money out there. LeaseSearch itself is preparing a huge number of lists of landlords and agents, identifying all those, so that they're our people that we can communicate with. Just in Sydney alone there's over 400 office real estate agents. As you'll appreciate, that's a lot of mortgages and a lot of families that are relying upon people working in the industry. It's a decent sized industry with a lot of people in there.
Kylie Davis: (22:47)
Yeah. One of the impacts of COVID is that people are working from home now, and there's been a big economic impact on it. Has that made technology like this more important or more difficult?
Simon Hayes: (23:06)
It's interesting because... the reason why I hesitate is because it's interesting to try and work out what's going on now with COVID in terms of... Sorry, this is going to be a long history. There's a number of different assets. There's obviously the residential assets. There's industrial, retail and office. So [inaudible 00:23:33] We'll forget about residential for the moment because you're an absolute expert in that and I don't need to tell you anything. But in terms of retail, we all already knew that retail was really in trouble, and now it's really, really in trouble.
Kylie Davis: (23:46)
Really, really, really.
Simon Hayes: (23:46)
Really, really in trouble. Industrial or warehousing is going gangbusters, and is still going gangbusters. Office is the one that I think, if you're coming back to COVID, is going to have a real interesting impact on it. Talking to a number of people in industry, and clients and previous clients, they're all talking about definitely reducing the amount of space, and certainly looking at people working from home. So, in that respect, I think that COVID will have a big issue on the office industry, and that's where I see LeaseSearch is getting a lot of its transactionals from, is that office sort of space area.
Simon Hayes: (24:27)
But where I see the industry being affected in the office industry... sorry, in the office premises, by COVID, is actually even though they're reducing space, what I believe is that they'll be potentially increasing the number of workplaces that exist, like smaller workplaces. So companies will start to go for more of a distributed network of offices to allow their people to come in and out, but they'll be on shorter term leases as well. So shorter, maybe drop-in space, but they'll be on shorter term leases, and maybe potentially have more leases, which then increases the number of leases and the number of turnover, which then is a benefit for LeaseSearch as well.
Simon Hayes: (25:13)
So it's difficult to obviously predict at this point in time. I'd love to have a crystal ball, because I think everyone else would love to have one as well, because there's a lot of theories out there at the moment in terms of what's going to happen with the office industry. Certainly some sensationalised ones, and there's some less sensationalised. But it's difficult.
Simon Hayes: (25:39)
I think with LeaseSearch, I think also one of the benefits is with this sharing component of it as well. Often you would get together with your client and go through information about what you'd received and the options, and now the client can click in and go straight in and see them coming in in real time, and they can comment on those and judge them for themselves as well, and you can talk to them on the phone. So that's a big assistance. I think it's difficult to predict at this moment, but I think LeaseSearch can certainly benefit from COVID but it's yet to be seen.
Kylie Davis: (26:28)
Yeah. It's going to be interesting. Someone was telling me the other day that in the commercial space, when times are a bit tight or when the market is turbulent, people tend to use it to upgrade their space or to move anyway because there's more options available on the market and they can get better space for a similar or cheaper lease.
Simon Hayes: (26:56)
Kylie Davis: (26:57)
Simon Hayes: (26:57)
Yeah, that's true. Again, then you get people also coming in from, say, they're in North Sydney... I'm Sydney-centric, so I'm thinking about North Sydney or somewhere in Paramatta [inaudible 00:27:08] will move into the CBD. So that does occur as well. With LeaseSearch, it's all about the number of transactions that occur in the market, not necessarily where people are moving to, or the size. It's more about the transactions.
Kylie Davis: (27:24)
So what's your charging model?
Simon Hayes: (27:27)
Oh, yeah. There's obviously two parts of LeaseSearch, one obviously being the tenant and one being the landlords and agents side. What we're looking at is a combination of subscription and commission.
Simon Hayes: (27:46)
With the tenants, there will be a subscription model where, depending on the volume of transactions that you put through, LeaseSearch will obviously indicate the price that you'd be charged. But then on the other side, on the flip side, we'd be looking... agents and landlords are used to commission-based for successful transactions. So if they're successful in being a successful landlord that leases their spot to the tenant, the space to the tenant, then we're probably looking to either part of the commission or a set piece of commission, or whatever it might be, or a success fee, or something along those lines.
Kylie Davis: (28:29)
So you'd be clipping the ticket of the agent's commission in that instance or would you be replacing the agent?
Simon Hayes: (28:35)
No, not necessarily. LeaseSearch is certainly not there to replace the agent. The agent certainly does have a job to do, and LeaseSearch is just a tool which the agents and the tenants can use. So the agent still definitely has a job. We're certainly not trying to take money away from the agent at all, but I think it's one of those things where we're suggesting that the opportunity that we've presented, and the tool and the workflow that's being used, has a value to the landlord and the agent, and it should be paid for.
Kylie Davis: (29:17)
Yeah, okay. Well, time is money and it sounds like... Before, you started to talk about the time that is saved from using it.
Simon Hayes: (29:25)
Yeah. The other company that I've been working with has been using it on actual live searches, I guess, the live process. Just one example in the past, it could have taken someone a couple of hours just to prepare a market brief which needs to be sent out to the rest of the market, and I've seen someone prepare one in five minutes.
Kylie Davis: (30:00)
Simon Hayes: (30:00)
So you can just quickly put some bits of information together and away they go. Certainly with the actual, what we were talking about before, with the press of the button with the Excel spreadsheet, I've seen someone take two days to put 54 bits of options together in a coherent fashion, whereas-
Kylie Davis: (30:22)
Increasingly crying towards the end.
Simon Hayes: (30:25)
And frustration, and going through all those, "Oh, no, do we have that? Did I look at that email or didn't I look at that email?" that sort of thing. Whereas you push the button and voila, it's there. It is time that you really are saving with this thing, and also it reduces the risk, and especially increases the probity around the decision-making and the receipt of information and all those sorts of thing. So especially if you're large corporations, or governments, it increases that efficacy around probity.
Kylie Davis: (31:02)
Kylie Davis: (31:02)
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Kylie Davis: (32:11)
So are you in market at the moment, or a proof of concept? What stage are you at?
Simon Hayes: (32:15)
So we are in market at the moment. So we are using, it's live. Can I use this opportunity to also announce that we have a LeaseSearch Light version, which is in operation, which I was just testing before I walked in here.
Kylie Davis: (32:37)
Did it work? It works, hurray!
Simon Hayes: (32:38)
Da-dah! I said, "I want it to work. I want it to work so I can announce it." So LeaseSearch Light is essentially... it's for everyone for free. What we'll be probably targeting this for is large corporates that do a lot of their transactions in-house, so your corporate people that do it in-house. Then there's also tenant representatives that do it on behalf of corporates or on behalf of organisations, and targeting those to be able to put them up onto a LeaseSearch... they'll be able to email them to support at leasesearch.com.au, which will then be put up onto a website with all the other market briefs, and then at 6:00 A.M., or we've nominated it at 6:00 A.M. the next day, all the tenants and landlords that we've put onto our list will get notified that there's new market briefs there for them to take a look at.
Simon Hayes: (33:36)
So that automation can occur and they can click onto that and click onto their link on the email, and they can go straight to those market briefs that are available for them to take a look at.
Kylie Davis: (33:46)
Cool. Well, look, we'll include a link to that in the show notes so that people can have a play around and see how it goes. So, Simon, look, what do you think the next five years holds for commercial real estate and automation? What I'm seeing is, and one of the reasons why I wanted to get you on the show is because there's so much going on at the moment inside the commercial space, and a lot of speakers and presenters out there basically urging the industry to do more.
Simon Hayes: (34:18)
Yes. In the technology space there's some very established players in the commercial industry, in terms of technology. What I mean by that is the classic database or property information management services, like MRI and [Manhattan 00:34:41] and those types of... and [BTS 00:34:45], I think, which are... There's those huge players. I should say, sorry, Salesforce seems to be really making a big push into the property space as well. It seems to be that those larger groups are starting to add more features on and add more features on, and trying to make it a larger opportunity for each of their users.
Simon Hayes: (35:17)
It has been quiet initially for a number of years, and I always thought that the technology was more focused on residential, but it's certainly now coming more to the commercial space. So there's a huge amount of players that seem to be out there.
Simon Hayes: (35:29)
I think where there's going to happen is there's going to be a lot of... and I think there needs to be, actually, is... you can't keep on giving either the tenants or the landlords little small point solutions. We're going to have to give them more integrated solutions. I don't mean giving them the next big Salesforce. I mean people who have point solutions joining together in an open collaboration where you say, "Okay, you may only want two point solutions at the moment but because we're in this sort of network, when you get bigger, you can also choose that point solution. And then you can choose this one, and then you can choose this one." I think for technology in the commercial property industry, I think that's where it needs to happen, rather than just having all these little bits and pieces hanging around.
Kylie Davis: (36:24)
Yeah. So one of the big changes inside the residential space has been the moving towards open APIs and collaboration around datasets and things like that. Certainly the fact that Australia's got centralised data of residential property through a couple of the big players like CoreLogic and Pricefinder has made that really easy. But in the commercial space that's been harder, hasn't it, because so much of that data is actually kind of owned by the big commercial agents.
Simon Hayes: (36:56)
Admittedly though, that is their... what do you call it... their market-
Kylie Davis: (37:02)
Yeah, that's their USP or their secret source.
Simon Hayes: (37:04)
Yeah. That's their secret source. It's like their market differentiation or their market advantage, having that information and using it in a way where they can increase the number of deals that they get or the number of management fees that they can achieve. I appreciate that in some way. There are some people that are trying to break down those doors and create a more open source of the information that can be accessible for everyone. So I think that that can happen, but obviously with the large number of players that we have... the small but large number of players that we have here in this national space of the commercial industry, it's going to be a harder break down of those walls to get through.
Kylie Davis: (37:51)
Yeah. It's a shame because you can't... well, you can own data, but data owned and not... data becomes more powerful when it's shared and collaborated upon. We saw that in the residential space over the last 10 years, where people's initial response was, "No, we own these details," but then all that happened was that people ended up being weird hoarders of data and, in fact, the value of the data was never really fully extracted. But now we're getting some momentum around that, and that's becoming really exciting.
Kylie Davis: (38:27)
Crystal ball out. I know I've asked you it but I think we got off track. So five years' time, what say that more open data and shared data across commercial, industrial and retail?
Simon Hayes: (38:41)
I would have thought certainly more open data, but I would have thought certainly too more... I think that we'll start to see winners in point sources, like solutions, point solutions for commercial property come through, but then those sources need to be integrated with others so that that will allow people to do what they need... like tenants or landlords or agents, to allow what they want to do without being restricted.
Simon Hayes: (39:15)
I know this as a fact, is one of the larger facilities management providers has had a management system that they've had for, well, five, 10 years, or whatever it is, and they're still trying to implement that system, or the features that they've bought, they're still trying to implement it. Now they've decided that, "We might not implement all those anyway, we might go and change to something else."
Kylie Davis: (39:40)
Oh, because after 10 years it would be pretty legacy anyway.
Simon Hayes: (39:43)
So you spend all of that-
Kylie Davis: (39:46)
"We've got the floppy disc, we need to insert it into...
Simon Hayes: (39:54)
You may find this in residential, but I think there's no one big panacea.
Kylie Davis: (39:58)
Simon Hayes: (39:59)
There is no technology thing which is a panacea, and everyone wants to look for one and implement it, but there is no technology panacea, and there'll always be changes or there'll always be things which are new, and I think therefore that we need to, as a technology provider, you need to provide the flexibility for the customers and the integration and the openness, as you were saying, the API and the open source of data, for people to go where they think is the best solutions.
Kylie Davis: (40:31)
Yeah. What we're seeing in residential is the development of expertise and that expertise being quite... people being experts in smaller areas but then playing nice with the others around them so that they can be plugged into... so that as a user of the tech, you can actually pick the best at all of those things and plug it together the way that you want to make your own service, to differentiate through your service.
Simon Hayes: (40:56)
Absolutely, you're right. Because especially some people say, "I've got this massive big thing that I use, and some bits are great."
Kylie Davis: (41:02)
Simon Hayes: (41:03)
Yeah. "But I pay for this feature I don't even use." I should say, if I see the future of LeaseSearch in that as well, I think there is a number of things that I think that LeaseSearch could integrate with, because it's just one small bit of a very big cog that goes along with all these transactions. In particular, I've already been discussing with the agents, they said, "Yeah, I like your system but can it link in with mine so that when a brief comes through for your system, my system can just tell me which ones that it matches with? So if a requirement comes through, I've got all these spare spaces, or whatever they may be, and then you just go like that, bang, and then it's telling me which ones, and I can press a button, or with a couple of little presses of the button then I can just respond straight away without me having to do much work," which is-
Kylie Davis: (41:58)
Sounds like you need some AI, Simon.
Simon Hayes: (42:02)
So that's right. Even when you think about it too, and just another example with LeaseSearch, and this is all the work that we need to do after we get it up and running, is to then... the next step would be, post signing the heads of an agreement on a lease proposal, you then move into the lease documentation stage. I know that there are processes, there's workflow tools out there which allow you to do that, and then there's obviously the execution of those documents which is like the [inaudible 00:42:35] and other things out there, which allows you to then execute. LeaseSearch is one small part of a very large process, and that's where I think the integration can occur.
Kylie Davis: (42:45)
Fantastic. Well, I know some people I now need to hook you up with in the contract space or the commercial space. But, look, it's been lovely to talk to you today. Thank you so much for telling us about LeaseSearch, and best of luck with it.
Simon Hayes: (43:02)
Thank you very much for your time.
Kylie Davis: (43:04)
So that was Simon Hayes talking about LeaseSearch.
Kylie Davis: (43:07)
Now I'm going to confess that I'm finding the commercial real estate space increasingly intriguing. The sector is dominated by a half dozen or so major players in agency land and big developer corporations, all of whom seem to be behind where they need to be in terms of tech adoption. The conversation around data sharing and open APIs in commercial real estate are all at least five years behind the residential sector, with the industry still believing that data control is a viable way to avoid disruption. Here's a bit of a hint, fellas: it isn't.
Kylie Davis: (43:43)
In addition, the large and really slow sales cycle of big corporates around bringing on new contractors, kills the fast innovation cycles of young start-ups. It's really hard to deliver cutting-edge technology when it can take two years for a company to make a decision. Meanwhile, we've seen a host of big commercial players quick to sign up to proptech incubators, only to pull out as soon as the economy took a downturn with COVID.
Kylie Davis: (44:09)
So supporting innovation is more than just naming rights and supporting tech that will help you with the next quarter's performance. I am really passionate about that. In an industry that is quite literally building our future cities, we need an equally big vision for how technology will make both the buildings in those cities and the people who sell and lease them smarter and more efficient, and we need to make life easier for tenants and landlords.
Kylie Davis: (44:34)
So that's my gauntlet, I've thrown it down. If you're in commercial property, I'd love to hear your views. But I am impressed with the work that LeaseSearch are doing to streamline the leasing process and to reduce the rework and triple handling that current manual processes of lease comparison and suitability have. In residential, we are seeing an increasing trend of the centralization of documentation, combined with the ability to insert and extract data in and out of that documentation.
Kylie Davis: (45:02)
The work that LeaseSearch, and LeaseInfo that we heard from a few weeks ago, the stuff that they're both doing is mirrored in the residential space by companies like REI Forms Live, RESO, [Open 00:45:14], [Realtor 00:45:14], [Market Buyer 00:45:14], and Real Time Agent. They're all merging the data and processes centrally to allow the information to be shared and shown in real time, and there are huge efficiencies and time savings in that, both for agents and also for buyers, sellers and tenants and landlords.
Kylie Davis: (45:34)
So now if you've enjoyed this episode of the Proptech Podcast, we would love you to tell your friends or drop me a line, either via email, firstname.lastname@example.org, on LinkedIn, or on my Facebook page. You can follow this podcast on Spotify, Google Podcasts and Apple iTunes, and all major podcast platforms.
Kylie Davis: (45:53)
I'd like to thank my audio support, Charlie Hollands, the fabulous [Gill Escadero 00:45:57], and our sponsors, Smidge Wine, because everyone deserves more than a smidge, Direct Connect, making moving easy, and HomePrezzo, turning your data into amazing marketing content.
Kylie Davis: (46:09)
If you'd like to find out more about Australian proptech, please join the Proptech Association Australia, proptechassociation.com.au. Links to all our supporters are in the show notes.
Kylie Davis: (46:22)
Thanks everyone. Until next week, please keep on propteching.
Content marketing strategist, researcher, journalist and presenter specialising in the real estate industry. I'm passionate about proptech, digital disruption and all things property, big data, leadership and entrepreneurial ideas, have an MBA and specialise in social and digital media content creation and automation.