JLL, Lendlease launch proptech accelerator in Singapore

Singapore

GLOBAL real estate giants JLL and Lendlease are partnering to launch an accelerator in Singapore to kickstart innovation in real estate, an industry said to have been slow to tech advancements.

But unless both companies commit to a substantial investment and a long-term plan to "transform legacy businesses", the accelerator will yield limited benefits, observers said.

Propell Asia - described as the first Singapore-based regional property technology (proptech) accelerator - opens for applications on Monday.

It is a 10-week programme where five startups from the Asia-Pacific will undergo intense mentoring and product development to create "the next proptech gamechanger".

At the end of the programme, each startup will get a S$20,000 grant (in exchange for up to 5 per cent equity to JLL and Lendlease) and an opportunity for follow-up investment from JLL Spark, JLL's new US$100-million venture fund.

Jeffrey Seah, a partner at tech advisory firm Mettle and Salt Partners, told The Business Times that the declared investment sum by JLL (an American real estate services firm) and Lendlease (an Australian property developer) does not inspire confidence.

"If the intent of the corporates is to actively partake in self-disruption, the sum of S$20,000 for each new business idea might be too small."

He explained that the impact of each startup's solution to "transform the corporates' legacy businesses" could be valued at 10 to 100 times their investment. "The seriousness and strategic intent of such a programme need to be reflected in the seed funding."

Steven Ming, managing director of Sakal Real Estate Partners, a boutique property investment and advisory house in Singapore, said as much: "Most founders are already bootstrapping and tech product development costs do not come cheap. Founders want to have enough funds to focus on developing a minimum viable product and not constantly fret over fundraising."

When asked about the total investment into Propell Asia, a spokesman for the accelerator said: "We can't put a precise figure on the investment at this point, as it is a combination of a number of external costs and internal resources. All costs and investments are split equally."

Tony Lombardo, Lendlease's chief executive for Asia, noted that the accelerator can provide benefits that are "more valuable than funding alone". This includes access to the entire real estate value chain - including investment, development, construction, brokerage, consulting and facilities management - mentorship, and opportunities to test and validate new products.

Albert Ovidi, JLL's chief operating officer for the Asia-Pacific, added that Singapore makes a good base for Propell Asia given that it has an increasingly mature startup ecosystem, pro-innovation government policies, as well as strong talent.

Real estate - even though one of Singapore's most-watched industries - has traditionally been slow to tech advancements, said Mr Ming, who was also formerly head of investments at real estate services firm Savills Singapore. He attributed this to a "if it ain't broke, don't fix it" mentality and high entry barriers in proptech in terms of cost and labour.

"The last time tech had a meaningful transformative impact in the property services space was online listing platforms."

But things are different today, Mr Ming said. "A tech revolution is taking place. It's an easier environment to fund-raise and tap government grants. The proliferation of tech in our everyday lives is improving user experiences and raising expectations in just about everything we do now.

"Embarking on a proptech journey is just keeping with staying relevant amid changing times."

For its first programme, Propell Asia is calling for early-stage startups with a "clearly-defined product" in any of these four areas:

Mr Seah, who is also a partner at IncuVest and Quest Ventures, hailed the four areas as "well identified". He added that by teaming up to launch an accelerator, JLL and Lendlease can "derisk the process". The duo have two other partners: MeshMinds, a creative design incubator; and District 6, a coworking space in Odeon Towers at which Propell Asia will be based.

Propell Asia is the latest in a seemingly endless slew of accelerators to have hit Singapore in the last five years. In January, the Singapore Academy of Law launched Accelerate!, a 100-day programme aimed at nurturing legaltech startups. In June, ridehailing company Grab announced the launch of Velocity, its accelerator programme targeted at growth-stage startups.

When asked how to spot an accelerator that is genuine about disrupting legacy businesses and not just participating in the "global disruption theatre", Mr Seah said: "Look at what they do with the startups. If they find very good players, they should take a substantial stake (of more than 30 per cent) in them and quickly integrate the startups' disruptive assets into their legacy businesses."