Please tell us about your business
IMMO is a tech-driven investment manager, which sources, leases and manages single family residential homes with the aim of unlocking this part of the residential sector for institutional investors.
While build-to-rent apartments have grown rapidly as an investment class, single family residential is 98% of the sector but has not so far been structured to appeal to institutions.
We offer homeowners the opportunity to sell their homes to IMMO, then we refurbish, improve and lease these properties to new tenants, on behalf of institutions looking to build stable single-family rental portfolios.
How important is technology and innovation to the future of your company?
Technology is at the heart and in the DNA of our business – every person within the company operates with a data-first mindset. This is what differentiates us versus other real estate companies.
This differentiation is key to solving the many problems that exist all along the residential value chain. We have taken apart and put back together every single stage of the value chain in a smarter way.
Many of these pain points are consumer related. For example, selling or renting a home is among the biggest transaction anyone will undertake, but it still shocks us that you can pay GBP 3 for a coffee and get a better and more consistent product and service compared to when renting your home, which your largest and most important expense every month.
The certainty and professionalism we provide to sellers is important to them, and renters get a great quality, newly-refurbished home. Our customer support team and our contractual processes are all dedicated to providing a seamless, digital and efficient service to consumers.
How does technology help with the running of IMMO itself?
To begin with, our underwriting process has been transformed.
Traditionally an investment manager would build an Excel model, spending days or weeks trying to gather information from different experts but we have automated that process.
We have also changed the way comparables are selected for analysis of a transaction through machine learning tools.
But these aren’t `black box’ automated valuation models where you don’t know how you have come up with a number: the outputs, cash flows and sensitivity analysis are all calculated and reported in a fully auditable, transparent manner.
It would normally take an investment manager several days to underwrite an investment from scratch: we can do that in 45 minutes since 95% of the process which is data gathering, copying and pasting into the model, creating the investment recommendation etc has been automated.
Technology is also important to us in creating a seamless flow of information: typically, people pass spread sheets down the value chain – and you then have extremely smart people wasting much of their time simply reconciling those spreadsheets.
We have devised a system that automates many workflows, enabling clean, efficient data to be accessed and used at every step of the value chain: a data-first mindset is key to our business.
How will technology help as IMMO grows?
We have been in business for four years, developing technology across our value chain. 80% of our technology acts as a blueprint that can be transferred across to new international markets and everything we do has been built with scaling up in mind.
The market intelligence and analytics we have been able to provide to investors on this huge but new institutional sector has blown them away. The transparency on offer allows them to drill down into each asset as they want to, and can access very granular detail.
How does real estate’s take-up of technology compare with other sectors?
It’s very promising that there is a huge intent to digitalise the real estate sector generally, but so many companies are wrestling with how to incorporate technology in two ways.
First, the IT infrastructure is missing, and it will be massive for them to try to change or rebuild.
Second, companies are appointing Chief Technology Officers or Heads of Digital Innovation, but they alone cannot transform a business. It needs a real change of mindset across an entire organisation to fully embrace and adopt technology to the level required, and not every real estate company is ready for that. Ideally, every single employee will be challenging themselves to think how technology and data can not only improve processes, but also empower them to make smarter decisions.
How has COVID-19 changed the influence of technology in real estate?
COVID has massively accelerated the process. Before the pandemic, people were hesitant in understanding what technology could do, but adoption in the last year has been fantastic.
This has forced people to realise the world is changing, and for real estate it has been a big wake-up call, making them more open-minded on what technology can do and should do. Hopefully, many people will also go several steps further and challenge themselves and their companies to consider how they can better incorporate technology.