Kate Robson

How the rise of contech will benefit investors and project teams



For what is always considered a traditional industry, property has seen incredible innovation from disruptors in the past decade.

Leading the way in this technological revolution are the headline grabbers: modular builds, off-site pop-up homes, proptech apps for consumers and online lending platforms. However, there has been an emerging sector creeping in over recent years.

Contech — technology created for the construction workforce — is slowly becoming a permanent feature within the industry as we continually grapple with both a productivity and housing crisis in the UK. For the investors who put more than just capital into projects, ie time and knowledge, it has the potential to completely transform delivery and, in turn, offer more attractive yields.

Many big construction projects experience cost overruns and scheduling delays, increasing the overall cost for owners and contractors. Despite this, we estimate that at least 60–70% of construction companies are still not dealing with any digitalisation at all. This has stopped them from succeeding in a competitive market.

While we work our way through this transition as an industry, investors have a unique place in the market to encourage the use of effective contech on their project sites. By understanding the contech market, evaluating the easiest to onboard software and realising how this can increase returns and speed up project deliveries, lenders can advise partner developers to make serious changes to how they work. 

This may seem like a small change, but if adopted at scale, it could be enormous. The construction sector is currently suffering from a deficit in output due to a lack of digitisation and modernisation. If every investor looks to implement the best tech for their projects — and it becomes not just the best practice, but the norm — this could deliver immense benefits in terms of increased productivity, quality levels and safety.

For the bottom line, if you are investing in equity, your returns depend on the completion and sale of the building. By advising developers to adopt hand-held tech on construction sites, there is potential for projects to be completed much faster and, in turn, increase investor returns. For the investors who go on to own the building after completion — rather than building and selling immediately — seeking a sustainable portfolio will be top priority, therefore, having transparency of data to ensure ongoing success in running the facility is key.

As the sector continues its journey towards a digital future, it’s crucial for lenders and financiers to constantly stay abreast of new advances in the field. By doing so, they can better understand the projects they finance, achieve higher yields in shorter timeframes and, together, work on creating a more productive industry. New technology will change behaviours at all levels and — with more planning and collaborative incorporation of technology between owners and contractors, who see the cost benefit potential — this will drive wide adoption and industry change to bring construction into 2020 and beyond.


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