Green Building Upgrades Fuels Proptech Fundraising In Asia Pacific
ASIA PACIFIC – As growing demand for eco-friendly upgrades to buildings helps boosts the property technology (proptech) market, venture capital (VC) companies are expediting fundraising into proptech startups in the region, reported the South China Morning Post (SCMP) on Sunday afternoon (12 February, SGT).
For instance, Los Angeles-based VC company Fifth Wall is raising capital for an Asia Pacific proptech fund that will be overseen by a regional team which was formed in Singapore last month.
Another VC firm, Hong Kong’s Undivided Ventures plans to close a US$50 million fund by the end of 2023 that has a hard cap of US$100 million.
Based on projections by consultancy & research firm Future Market Insights, the global proptech sector is forecasted to grow at a compound annual rate of 16.8 percent to reach US$86.5 billion by 2032.
Due to the upbeat outlook, venture capital funds are providing funding to promising startups that would bring innovation to the property industry, as well as help significantly reduce the sector’s carbon emissions.
“Real estate owners need technology more than ever. Over a long time horizon, we believe proptech growth is inevitable,” commented Fifth Wall’s Co-founder Brendan Wallace.
“Decarbonisation technology is probably the single biggest opportunity to technologise the real estate industry.”
Notably, proptech encompasses many things. It improves how people research, buy, sell, lease and manage real estate. I can also involve applications, robotics, data analytics, the Internet of Things, and artificial intelligence, such as apps for adjusting office temperatures, or cleaning robots that climb the exterior of office towers.
“When you’re focused on the built environment, which is responsible for arguably up to 40 percent of all greenhouse gas emissions worldwide, but gets not a huge amount of capital invested into proptech solutions in climate and sustainability, then there’s a huge, huge potential,” reckoned Undivided Ventures’ Co-founder Alexander Bent.
According to data from the United Nations Environment Programme, the property industry generates about 40 percent of the world’s overall carbon emissions.
Fifth Wall – which foresees more countries in Asia Pacific to follow their American and European counterparts in trying to slash their carbon footprints in the property sector – disclosed that it is increasing its investment in climate tech. These include battery technology, green construction materials, and microgrids, or self-sufficient energy systems.
Jones Lang LaSalle’s (JLL) unit JLL Spark is also cognisant of the proptech trend, said its Managing Partner Chris Pu.
In fact, the property consultancy is establishing a new renminbi fund in 2023 after investing over US$340 million across more than 40 proptech companies. Specifically, it intends to invest in China-based firms that cater to real estate investors and occupants via innovative solutions in sustainability, smart buildings, construction technology, financial technology, industrial technology, and the future of work.
“China’s tech start-up scene has grown rapidly, leading to the disruption of traditional industries in the region, including real estate,” Pu added.