Property AI Report
00:00:00 · Mal McCallion, Matt Goddard
[00:00:00] S0: Hi everybody and welcome to the Property AI Reports. This is your weekly digest of all things property and AI, brought to you by me, Mal McAlier, and my good friend and co-host, Matt Goddard. Matt, hello there. How are you today? [00:00:11] S1: I'm very well. Are you not meant to be doing this with a Welsh accent given you're in Cardiff? [00:00:15] S0: Is that what people do in different areas? [00:00:17] S1: Come on, give it a go. We can dump it over. [00:00:23] S0: Just get 11, lads. Yeah, exactly. [00:00:26] S1: I am in Sudland later this month, so maybe I shouldn't make threats like that. [00:00:31] S0: Just let me know how you get on, alright, when you try with a few people on there. Alright, uh, we really should be getting on with our true purpose here, which is to talk about property and AI. So let's kick on with our property news. Alright, first up, um hot off the press this morning, Tuesday, the 1st of September. We have um an acquisition. Um and it's a pretty big name, uh, particularly in the London lettings market. Paramount um has been acquired by Dwelly, who are also building up quite a head of steam and quite a um yeah reputation indeed for going after some really strong businesses. Um, Matt, this is very big news, I think. Um, what's your take?
00:01:08 · Matt Goddard
[00:01:08] S1: It's it's really strong signals again from Dwelly, isn't it? For for a recap for those who aren't regular listeners. And if you're not regular listeners, you know, like, subscribe, follow, and you will become regular listeners. But uh, Dwelly started off as a prop tech lettings platform and struggled, as as I understand it, to actually get into letting agents, so decided to actually start raising funds to buy those lettings agents they couldn't sell the technology into. And uh they've now made a number of uh high-profile acquisitions, and and with this latest one for Paramount, they were well regarded, very well renowned, run by Spencer Lawrence. This acquisition as of today takes them up to 15,000 properties under management, so quite a pivot. But we we touched on maybe last week, a couple of weeks ago, it's obviously lettings is where the private equity houses are seeing it. So Dwelly being backed by PE and starting to hoover up lettings, but maybe isn't a surprise. It's just more that they've taken that technology focused approach. And I do know that they're talking to some really big agencies in lettings. So I don't know if this will be necessarily the last of these acquisitions. What do you think about it?
00:02:10 · Mal McCallion
[00:02:10] S0: Yeah, it it it it does feel like they're picking up a bit of ahead of steam, doesn't it? You know, to to to go after some of the, you know, not quite blue blood, but certainly, you know, the more established, more reputationally strong businesses and actually being able to acquire them. Because I I don't doubt that Paramount would have been approached by pretty much everybody along the way. You know, Dexters would have loved it, you know, LRG, Loman, all of those guys, I'm sure. And so, you know, either they've paid an eye-popping amount of premium over what Paramount were being offered elsewhere, or that the tie-up is just so good that actually, you know, whatever equity split between the the previous owners and um and Dwelly just makes makes much more sense to them. But yeah, no, this this feels like a step along the way. I'm almost certain that there will be more of these. And yeah, it just feels like um Dwelly is is as you say, from from being a software business that you know tried to pitch the software and then actually people didn't really want to get did didn't really understand that. I think is probably the best way or the most kindest way of describing it, to then you know getting an absolute chunk of change from PE and then using that to go after the people that said no to them in the first place. Is is is is a great story and is very impressive. And you know, that um kind of speaks to how these big finance financiers are looking at the the market and looking at AI. Um so yeah, I think it's um I think it's a really interesting move. I think that yeah, it's it's it speaks well of obviously Spencer and the guys there at Paramount, um, but also, yeah, this coming force that is Dwelly um and their technological um backing. Um and yeah, just it's gonna be interesting to see where they where they end up next, but I'm certain that there will be more. All right, next up on our property news, Spyter Hut um are talking big about a 1.7 million tech bet, specifically around the lettings side of their CRM. Um historically they've um had an in-house CRM system and they've maintained themselves. Um but now they're branching out, aren't they, Matt? They've gone to uh they're starting to use Rex. It's built on top of Rex. I'm not sure if it's actually Rex, is it?
00:04:02 · Matt Goddard
[00:04:02] S1: Well, as far as I understand, it's built on top of Rex. And and so taking it back the steps, SpicerHeart, I guess it must have been a number of years ago, was sort of the uh beachhead for Rex sales when it moved over from Australia, and SpicerHeart took it very much as a uh almost Salesforce style platform that you could customize, build your own screens, add to the APIs without having to go to them as uh a development house. And that's SpiceHeart, I think, probably the biggest and main client of Rex is in the whole of the UK, right? We've got a lot of uh a lot of clients, but SpicerHeart are huge, and property management property management's been threatened for a fair while from Rex here in the UK and obviously Australia as well. But actually, um it looks like they've now built on top of that, made their customisation specifically around Renters' Rights app and uh now launching it. And I think 1.7 million over five years doesn't sound that actually expensive compared to what we know a lot of people who run their own software are are paying. What do you make of it, Mark?
00:05:02 · Mal McCallion
[00:05:02] S0: Absolutely, I'm not I'm certain that when they when they've done the maths, as I'm sure Paul Smith and his the guys and girls have, um, then 1.7 million is probably a lot less than they would be paying for their own bespoke piece of kit, particularly if they've got to retool it for the world of AI and try and actually make it, you know, with the like a dwelly kind of going around and you know, um super efficient, um, making uh the businesses that are competing with Spicer Heart in various locations for the CJ Laws in London. Um so yeah, I I think it it makes sense. Uh there's always this question, I think, nowadays, about do you switch? I get I get asked all the time from ages like you know, should we be changing our CRM system right now when AI is coming along and we don't know quite you know, blah, blah, blah. And and I think it is a big decision right now because the the tech is changing so much. You know, one of the things that I always say to anybody is is make sure you you preserve your data. So yeah, if you are moving CRMs, then getting to come keeping your data is the most important thing for you right now because AI learns off data. And if you have somehow decided that you know you only need to have the last few weeks of your data, that that to me feels like definitely the wrong move, not necessarily moving CRMs. But yeah, this this um yeah, it looks like they've got a good deal. I'm sure they've they've got a strong negotiating position of Spice or Heart. But also, you know, it speaks well to Rex, right? You know, actually they're they're being chosen by a significant player and you know their kit is is is up there in terms of um in terms of what what it does. And always it's it has struck me that the letting side is is the hardest one to crack, right? You know, I think that that if you speak to any any agents that are particularly in lettings, it's almost the last thing they transfer because it's the most the most cash generative on a regular basis, and if they mess it up, it's the most highly regulated and the one that's gonna kick them in the butt really, really fast. So yeah, that's um a big target like Spice the Heart, who, if they do get it wrong, is likely to be on the first on the uh on the list of those for Angel Martin or whoever who wants to come after them um to choose Rex and decide to go big on this.
00:07:00 · Mal McCallion, Matt Goddard
I think it speaks well to that business, certainly. I mean, yeah, I think it's gonna be it's going to potentially make the negotiations of other businesses slightly more uh what's the word, sharp, shall we say, in terms of what would yeah, what they're willing to pay for CRMs, because this doesn't feel like it's a lot. [00:07:16] S1: No, it's not very cheap. [00:07:18] S0: Okay, so next up on our property news, we want to look at the crisis in surveying. So apparently half of surveyors are going to retire within a decade. Um and nobody's no young whippersnappers are coming up wanting to fulfill the uh sorry, to fill the surveyor gap. So, you know, this is a report of the first annual survey of surveyors, which feels like it really should have been going for a lot longer than than one year. Um it's revealed almost half of all residential surveyors are due to retire in the next 10 years. So, Matt, obviously slightly concerning, right? Or basically the robot's just going to do this pretty soon.