The Real Estate Institute (REINZ) has
announced that it is selling its head office in Parnell to move the offices to
the city fringe.
This seems a pretty sensible decision. The section has a capital value of $6.1m and is in size, in excess of its needs. The property is outdated and from personal experience (I worked there for 2 years) it is a very antiquated office layout far from conducive to modern work environment.
So what to do with this capital gain of $6+ million given the financials of the Institute can more than maintain a new city fringe office and staff – income from fees alone totals over $2m a year.
The article in the NZ Herald stated that the Institute was "looking to invest the proceeds in buying an investment property". Why? The role of the Institute as I read it from their website is to promote professionalism and quality and represent the interests of its members. Surely there are more productive ways of using $6+m then buying a dead asset?
As a starter and to prove that I am not just being negative about REINZ. How about REINZ taking a leaf out of their sister organization in the US – National Association of Realtors (NAR).
NAR announced last year that they were establishing a tech incubator – ‘NAR Reach’ is a tech accelerator programme which will help up to 10 companies develop useful tech tools for Realtors and others.
The real estate industry is by comparison with other industries a technology laggard. This has to change. This will change. The only question is - does the Institute consider its role includes facilitating and driving this change?
Would it not be of great long-term value for REINZ to invest and support technology companies who could provide services and tools to the industry to assist its member become more productive and enhance professionalism.
Smart technology for real estate agents would also be financially beneficial as the processes of real estate in NZ are almost identical to Australia, UK and many other markets, thereby creating export opportunity and credibility for REINZ as well as a valuable long-term asset through equity ownership in start up companies.
Now as with any incubator investment programme there are going to be winners and losers, however if REINZ were to invest $100,000 in each of say 5 NZ companies equating to less than 10% of the proceeds of their property sale; in 3 years they would likely be down no more than a couple of hundred thousand as a worst case scenario, but more importantly they would have challenged their members to embrace new technology ideas and systems and maybe created a new toolset of long term value. They might just be held up as a progressive industry organisation investing members assets in growing the smarts of the very future of its industry!