7 July 2021
HONG KONG: Technology isn’t just changing how we live – it’s also turning whole industries upside down. With the emergence of new technologies such as artificial intelligence and cloud computing, companies around the world are racing to find new ways to optimize not only individual processes, but whole business models. The commercial real estate (CRE) industry is no exception. From construction to operations to transactions, the usually conservative real estate industry is facing its largest disruption since the invention of the automobile.
Hong Kong’s land development has entered a period of saturation. How to make better use of the land has become a hot topic in the CRE industry recently. The traditional real estate industry is increasingly willing to embrace technology, but can property technology (proptech) bring real, needed change to the real estate industry in Hong Kong, or even bring the entire industry to a new level?
En-trak, headquartered in Hong Kong, is an award-winning proptech IoT solution provider. Its mission is to make buildings more efficient, productive, and comfortable places to work, all while helping to reduce carbon footprint and operating costs.
Dr. Chow Kong Meng (Vincent), CEO and founder of En-trak, shared with Bloomberg his views on the development of Hong Kong’s proptech scene. An excerpt of the interview is as follows.
Q. Why was En-trak founded in the first place? Did you notice the concepts and trends of ‘proptech’ at that time?
A. En-trak was established in 2013. Before that, we were in the solar PV industry. We gradually turned to “smart building” technologies like energy management and lighting control, eventually developing our comprehensive tenant experience platform to bridge the landlord-tenant gap with technology. When we founded En-trak, the concept of ‘proptech’ was not common yet. Our initial goal was to save energy, and we are very grateful to our customers for their on-going support to En-trak. To our customers, En-trak is not just as a subject expert, but a solution provider that delivers real value.
Q. In which areas and buildings has your technology been applied? What are the specific results (energy saving, etc.)?
A. To date, our business is mainly concentrated in the APAC region, with headquarters in Hong Kong and offices in Singapore, Mainland China, Thailand, and Australia. Among all regions, our longer presence in Hong Kong and Singapore has led to a long list of successful projects with different developers such as New World Development in Hong Kong and Sembcorp and Keppel Land in Singapore. The impact of these projects is substantial. For example, KOHO, one of New World Development’s commercial office buildings, has saved 13% on AC energy consumption and 38% of lighting energy consumption after the deployment of our solution. This was done without replacing any lights or AC units. More importantly, occupants can enjoy a more comfortable and convenient work environment, driving further demand from tenants. We are beginning to replicate this success in our other markets and are facing an exciting 2021.
Q. What challenges and opportunities do you think proptech will face in Hong Kong?
A. Limited spaces and resources remain the most fundamental challenge for Hong Kong. Hong Kong’s unique circumstances, such as extremely high density, sometimes make it difficult for solutions developed there to be applied to other Asian markets. This particularly applies to the CRE industry. So proptech needs to take other regions and markets into account in the design stage to ensure the scalability of the business. However, there are still many opportunities at the moment, especially at this time of disruption of the traditional workplace. The demand for workplace technology and solutions is increasing exponentially. As long as we can address to the pain points of different markets, ‘Made in Hong Kong’ still has a lot it can do.
Q. What do you think of the prospects for the proptech development in Hong Kong?
A. Overall the future looks positive. At present, many new buildings have already taken proptech into consideration as early as the construction stage. For renovation of old commercial buildings like those in Kowloon East, there is lots of room for energy saving through technology. We have upgraded and transformed similar buildings, some 60 years old, and the results have been very significant. Although some Hong Kong developers have taken the lead in sustainable development, achieving a wider scope of deployment will require the government to boost its efforts with related policies. However, it is expected that the application of proptech, either in new or old buildings, will only continue to increase.
Q. The traditional developers are also creating their own R&D laboratories or even entering the proptech field. Do you think it will affect the space and scope of the startups in this field to grow?
A. Certainly not. In some ways, we welcome the new attempts by property developers. Like other industries, the CRE industry must undergo a learning curve, in which there will be successes and failures, and some will give up. But when more developers begin to try, they also begin to understand – becoming more educated customers. These days when we discuss projects or cooperation with them, we don’t need to start from the demand-level. We share a common understanding of what technology can do and why they need it, so we can focus on our unique advantages and approaches. As to whether direct competition will form, I personally don’t think so. The main business of property developers is always the building itself. Even if they develop their own systems, it is difficult to persuade other developers to use that system. This involves complex issues such as data and sensitive corporate information. Third-party solution providers will always have unique advantages.