A lack of quality technology solutions has held back customer experience in the £1-trillion commercial property industry, but a new online platform is now helping it transform
Online marketplaces that enable consumers to search online have transformed many sectors. From Amazon to Autotrader, Airbnb to eBay, online search has changed the way people shop. Yet in the business-to-business world it is largely still more novelty than utility.
This divide is no more apparent than in the area of property. The UK residential property industry changed drastically when Rightmove brought property searches online in the late-1990s, followed by Zoopla a decade later. Despite companies such as LoopNet and RealCommercial replicating the experience for commercial property in America and Australia, the industry has yet to evolve in the UK.
The recent rise of WeWork, however, has woken the UK’s commercial property industry up to how technology can transform the customer experience. WeWork’s questionable business model is under the spotlight, but as the first commercial property company to take a truly world-class approach to marketing it has shown just how alluring a great brand can be to commercial tenants. The result is an industry in rapid catch-up mode.
“WeWork is very strong online and has filled a lot of space in its buildings by taking advantage of digital channels,” says Andrew Miles, chief executive and co-founder of Realla, a search engine for commercial property. “On the other hand, the traditional industry hasn’t had a reliable online channel where they know quality tenants are searching.”
Our vision is to be the go-to place where commercial tenants and investors can find a terrific overview of the space available on an interface that’s very easy to search
Evidence that commercial tenants are searching online is irrefutable. While demand initially lagged behind the residential market, with less than half of commercial tenants searching online before the global financial crisis in 2008-9, in the last decade that has accelerated rapidly to around 90 per cent today, according to Google search statistics. Realla’s data shows that at least two thirds of FTSE 350 businesses have searched for commercial property on its portal during this year alone.
Yet online search in commercial property is still a very fragmented and frustrating experience for the end-user. “The internet has demonstrated that it can do an amazing job at matching products and services with the people who want to buy them, and at a very low cost,” says Mr Miles. “Targeted advertising has transformed every sector, yet finding the right commercial property is still unnecessarily painful for would-be customers.
“The landlords and big asset managers who own commercial properties still market them by sending around brochures. And it was only a few years ago when office managers still walked the streets noting down numbers on lettings boards. There has been no go-to place where advertisers know they’ll get in front of the majority of potential tenants. The lack of an easily accessible solution has damaged their ability to reach the online searcher.”
Lack of solutions in this area has resulted in a reliance on expensive and inefficient forms of traditional advertising. Finding a tenant for a small industrial estate in the north of England, for example, would require advertising boards on the surrounding A roads and a hope that the right person either saw them, or stumbled upon the local agent being used or the local newspaper listings.
At the other extreme, the owner of a London office tower has traditionally marketed the property through mega-launch parties, lavish gifts to incentivise agents and double-page spreads in the broadsheet newspapers. Marketing budgets of hundreds of thousands of pounds are not unusual, with no attributable return on investment.
Realla is leading the charge in addressing this imbalance between customer demand and the commercial property market. The company was acquired last year by an international specialist in this sector, NASDAQ-listed CoStar Group, which owns the leading commercial property marketplace in America, Loopnet, as well as Apartments.com, which is taking on the formerly fragmented US residential rentals market. The combined platforms host more than 60 million visitors every month.
Realla’s commercial-specific, jargon-free filters enable users to search for the kind of office, industrial or retail space they want. For each property, users can see a detailed, up-to-date overview with high-quality photography. The search portal is highly customised to commercial property, but is also logical, showcasing complex information in a digestible way and through a clean interface.
“That’s what makes Realla different to some of the residential property portals flirting in this space: we’re focused only on the needs of commercial tenants and the commercial agents or owners trying to advertise their space,” says Mr Miles. “Our vision is to be the go-to place where commercial tenants and investors of all kinds – retail, industrial, offices and serviced offices – can come and find a terrific overview of the space available on an interface that’s very easy to search.
“The whole commercial property industry wants faster deals and this will enable that. You can have beautiful online adverts which are highly targeted to anyone in the world who might be searching. An Asian company looking for a large headquarters building in London will retain an agent to help them search, but they will look on the internet as well. You need a superb online presence and you need to be on the portals where people are searching.”
It’s clear everybody stands to benefit from moving the commercial property industry online. Tenants get more liquidity and choice, not to mention faster discovery and a much better search experience. Landlords and agents, meanwhile, get access to a cost-effective way of advertising to targeted audiences.
The future of the industry has technology at its heart. Better data drives more-considered investment decisions by pension funds. It can improve the sustainability of buildings with learning algorithms that reduce energy consumption. And it makes the matching process seamless for tenants and investors who are searching. As all sectors strive to become more customer centric, data-driven search portals are key for commercial property.
For more information please visit realla.co.uk