Investment in real estate technology has seen astonishing growth since 2012 as companies are seizing the digital landscape to create technological innovations that add value to property owners and occupiers. The term PropTech is primarily associated with start-up organisations offering a more convenient, digital platform to facilitate traditionally manual processes such as the purchasing of houses. Many of these such as Zoopla or Purple Bricks are playing the role as an app based or online only estate agent.
However, there are several other ways in which developments in PropTech can benefit the commercial real estate industry.
How can PropTech benefit commercial real estate?
Technology can assist with many problems faced by real estate companies such as sourcing tenants to achieve maximum occupancy levels. Or help future proof against new property disrupters such as WeWork, this could come in the form of digitisation.
What is digitisation?
Digitisation is the adoption of digital processes to accurately and comprehensively access a building’s data in real time and then uses this data to identify opportunities to add value.
The approach taken by EP&T Global to utilise digitisation within commercial real estate is encompassed in four steps;
- Internet of things: Hardware devices that are wirelessly interconnected enabling them to send and receive accurate data in real time.
- Big data: A server processes billions of data sets to provide a deep insight into a building’s performance.
- Artificial Intelligence: Software autonomously looks for saving opportunities by analysing these large data sets and the factors affecting building performance. Historically, this analysis would have been undertaken very slowly by a human or not at all.
- Visualisation & delivery: The software systematically raises any opportunities onto an online platform accessible by any authorised person, anywhere. It provides in-depth detail of the issue meaning swift action can be made to deliver a measurable outcome.
In recent years, energy efficiency technology has been one of the primary focuses of PropTech investment due to strong sustainability leadership and increasing demand from investors to adopt sustainable practices.
Companies that have integrated this process into their facility management and sustainability initiatives have seen their energy intensity drastically decrease. This graph demonstrates the level to which digitisation can reduce energy usage across a varied portfolio, hence the cost and environmental benefit associated with a lower energy usage rate.
Energy intensity performance (kWh/M2) of assets before and after integration of the digitisation process – (Name of assets removed to ensure the anonymity of our client)
We have also found investor relations improve due to the thousands and potentially millions in cost savings produced and the limited risk through future proofing the building against increasing regulations as well as new players.
Additionally, the ability to demonstrate a digital building will attract a growing cohort of tech savvy and environmentally conscious workforce meaning a business can attract and retain tenants as comfort conditions are enhanced.
Clients of EP&T have saved over £50 million pounds in the past 5 years with an ROI upwards of 30% by embracing this technology. Yet there are still some key barriers to the deployment of PropTech that mainly concern making the financial case for investing in this technology.
The high cost and level of scrutiny placed on service charges, the ever-shortening lease contract length, complex landlord/tenant relationships and the fact that typically energy cost only amount to 1% of companies running costs are the main factors preventing further investment in PropTech.
The industry needs to continue to develop value metrics in addition to energy savings to expedite uptake of PropTech. This will ensure the other benefits of adopting PropTech are measurable and can be implemented as steps to show progress and assist in the achievement of an overall target
We foresee PropTech gaining the potential to offer a dual benefit of increasing health and wellbeing whilst reducing operating costs, leading to the attraction and retention of occupiers.
For more information surrounding the process of digitisation or the benefits it provides please visit www.eptglobal.com or alternatively email Ruaraidh.firstname.lastname@example.org
ABOUT EP&T GLOBAL
EP&T Global was founded in Australia 1993 to provide technology and processes that contribute to eradicating energy and water wastage within commercial properties and improve the overall sustainability outcomes of property developers and managers. EP&T has since developed a long and distinguished track record of delivering energy management solutions and cost reductions through our pioneering EDGE technology. The success of EP&T Global within Australia has led to growth by working with major property portfolios throughout Asia, Europe, Africa and the Middle East.
For over 20 years they have been building and developing the EDGE technology in-house to guarantee the highest proficiency. These advancements have seen them deploying the EDGE Zeus platform that integrates Big data analytics, Artificial Intelligence (A.I) and Machine Learning with Human Expertise to form a comprehensive and market-leading energy monitoring system that identifies real-time cost-saving initiatives for you. Their team of multi-disciplinary engineers is committed to helping their clients transform how they manage their assets and in turn achieve significant results.
This article is written by Steven Meleca, General Manager, EP&T Global, Australia, Asia, EMEA and
Ruaraidh Bellew, Commercial Director, EP&T Europe.