By Herbert Lash
NEW YORK (Reuters) -Equiem, an Australian firm that offers tenant services for office buildings, has acquired the property management platform of British Land Co Plc, a deal that marks a shift in how landlords address their real estate needs.
Terms of the transaction were not disclosed in a statement by the two companies released on Monday.
British Land, the largest UK real estate investment trust, acquired an equity stake of less than 10% in Equiem in exchange for the Vicinitee property management platform, a source familiar with the deal said.
The acquisition is the latest flurry involving property-focused start-ups known as "PropTech" firms, a sector that in the first quarter raised $4.5 billion of investment, or double the quarterly average in 2019, and had more than 40 M&A transactions, according to GCA Advisors in San Francisco.
Vicinitee will be key for Equiem to capture growing demand by landlords for technology that streamlines commercial real estate operations and enhances the tenant experience, said Gabrielle McMillan, the New York-based chief executive of Equiem.
"It's a digital interface for your building that becomes a remote control for all the things you need in a post-COVID world," McMillan said.
The deal increases Equiem's scale to 500 buildings in Europe, North America and Australia, expands its product line and deepens an existing partnership with British Land, which owns and manages prime London office assets, she said.
It follows Boston-based HqO, a tenant experience operating system, which two weeks ago raised $60 million to expand its operations. Real estate software and data firm View The Space Inc in March bought Rise Buildings, another tenant experience operator, for about $100 million, the Wall Street Journal said, citing sources.
A secular shift involving how technology is used to package, manage and distribute property assets, in this case office space, is occurring, Marcus Moufarrige, founder of software firm Ility, an operating system for commercial real estate, said of the Equiem deal.
"The problem is the (property) services now have to be offered through technology which they have not had the capability of doing," Moufarrige said of building owners.
Tenant experience apps initially provided tenants information about food and other services in a building. During the pandemic the apps have allowed landlords to communicate to their tenants about a building's hygiene, air quality and other safety issues.
Property management software coordinates and keeps track of myriad data about tenant accounts, leasing information, building entry and security, HVAC management and maintenance workflow.
(Reporting by Herbert Lash; editing by Diane Craft and Emelia Sithole-Matarise)