Industry warned to get wired and do it fast

By Campbell McIlroy

Friday 28th April 2000

Those in the property industry who do not adapt to the digital age will end up as road kill on the information super-highway, Property Council of Australia chief executive Peter Verwer warned at the launch of the Property Council's Future Directions programme.

In his presentation, "Digital Darwinism," Mr Verwer recalled Charles Darwin's premise that "it's not strongest of the species that survives, nor the most intelligent, but the most responsive to change."

The property industry's response to change in the digital age should be an online business model which focused on branding, content, alliances and fulfilment systems, Mr Verwer said.

Additional non-rental income streams through the provision of business services to tenants was one example of how the web could enhance the property business.

The best way to achieve this, according to Mr Verwer, was through portal sites based on a building intranet. Portal sites are gateways to the internet and intranets are internal internet sites.

These intranets could be used to market products and services such as telecommunication services, business supplies, travel, insurance, mortgages and online shopping.

The key to portal power was partnerships. There was little point in creating a portal unless it provided a gateway to something of tangible value, Mr Verwer said.

"The formula is simple: deliver more value, create more satisfaction and loyalty, and so enjoy higher returns."

There was one overriding component to this formula that should not be underestimated - the power of branding.

Consumers, whether business or individuals, would look for those who could guide them through an increasingly complex marketplace. Brand names became more important in a world where consumers couldn't touch or experience a product before it reaches them.

Distribution networks were also crucial to customer satisfaction as it was the last kilometre to the customer's home or business where a stumble could be fatal, Mr Verwer said.

This was another example of how the web had offered more opportunities to the property industry, this time by way of more demand for space, not less.

Last year Amazon.com announced a $US300 million real estate acquisition strategy; Webvan, a grocery site, had recently done a $US1.2 billion property deal with an engineering company to build 26 distribution centres across the US; closer to home internet giant Cisco Systems had leased nearly 24,000sq m on Sydney's North Shore.

This was all happening when the growth of e-commerce was still in its infancy.

American research house Forrester had just issued a report predicting Europe and Asia-Pacific would each see revenue from e-commerce top $US1.5 trillion by the middle of the decade and it calculated a total of $US6.9 trillion for global e-commerce by the end of 2004.

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