An online platform could harvest customer feedback and satisfaction ratings, and bring about changes to ensure offices remain operational in future. Nicol Dynes reports.
Airbnb could be the model for office space in the future and lead to better, more energy efficient and healthier buildings, as well as happier, more productive tenants.
“Even before Covid-19 there was a lot of unused office space, so it makes sense to go for a booking platform model to sublet spare capacity through. Think Airbnb for office space,” says Andy Saull, research associate at proptech ventrure capitalist Pi Labs.
Such a platform could foster feedback and customer satisfaction accreditation online. “We’ll get a lot of data and satisfaction ratings,” adds Saull. “In five years we’ll have a comparison website with all the data, a control loop which will also be the best way to get carbon neutrality. I’d call it a wake-up call for those landlords who have ignored the needs of tenants for so long.”
There is a disconnect between the information we gather about the places we visit on holiday or for short trips and the lack of information about offices where we spend a large part of our lives, says Saull. “When we go on holiday for two weeks we look at metrics, comparison sites and do our homework, yet we work in offices five days a week many months a year and we don’t know basic facts about the building.”
A recent study from the Massachusetts Institute of Technology, which looked at returns on satisfaction, concluded that buildings with the highest scores have a 29% premium in value. Already in London buildings with the highest EPC ratings (A or B) achieve 12% higher rents.
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“The returns on investment are clear,” says Saull. “I can’t promise there’ll be an immediate rent increase, but it’s 100% guaranteed there’ll be one in the future. In 10 years you’ll get the premium. There has never been a better time to invest in proptech.”
Covid-19 has changed the landlord/tenant dynamics forever. The spotlight on wellbeing has led tenants to realise that offices can be both healthier and more sustainable.
“The combination of the climate challenge and the health emergency has been a real wake-up call for the real estate industry,” says Menno Lammers, initiator & chief proptech officer at cross-industry development platform Proptech NL. “There’s an awareness that everything is connected, buildings and the environment, the inside and the outside, and that we need to act.”
One example of the changes is the heightened awareness of air quality. People have become conscious of the air they breathe in a space where they spend many hours a day.
“Pre-pandemic a lot of health initiatives were seen as fluffy, nice-to-have, but not essential,” says Francesca Brady, CEO of certification body AirRated. “Then they were seen as a competitive advantage, because monitoring air quality improves productivity and has a positive impact on the bottom line. Now a healthy environment is being taken seriously. It’s become a must have.”
‘Buildings should be our safe havens, they shouldn’t make us sick. There is so much you can do to improve air quality.’
Francesca Brady, AirRated
New technology has become more accessible and less expensive, making it easier for landlords to improve working environments and address tenants’ concerns.
“Buildings should be our safe havens, they shouldn’t make us sick,” says Brady. “There is so much you can do to improve air quality, from using natural materials to ensuring there’s adequate ventilation, from putting carbon filters in to avoiding partitions and windowless rooms.”
It becomes a differentiating factor for a building. “An unventilated space can be an ideal petri dish for Covid-19 transmission,” notes Antony Slumbers, co-founder of the Real Innovation Academy. “We’ve known about the impact of environmental conditions for a long time but today we can no longer ignore the issue. Health begins with air.”
Technology makes it possible to make huge improvements to air quality with a minimum impact on energy use, adds Michael Grant, COO of smart building platform Metrikus: “People tend to forget quickly, but I think that with Covid-19 the importance of air quality has been learnt and won’t be forgotten.”
Data has the answers
Proptech has the answers to landlords’ and tenants’ questions and data are the starting point. “You can only make the necessary changes if you have the data to evaluate them and act on them,” says Caleb Dunn, commercial analyst at software company Re-Leased. “Covid-19 has broken down barriers and people now better understand the big role that data are playing because it’s on the news every day.”
The next step is standardising data across regions and across platforms so that it’s possible to compare like-for-like and make informed decisions. “People want to compare their building and its performance to others,” says Dunn. “There’s an increased appetite for benchmarking.”
Despite the great strides made this year, attitudes to technological innovation still vary: some companies see it as an investment, some see it as an insurance policy, others as a cost they try to avoid.
“It’s a challenge for everyone,” says Stefan Plesser, owner & managing director of software platform provider Synavision. “Some companies see it as an opportunity to take action and improve things, many are worried about the costs. Some go for platinum or gold, invest a lot in green technologies, but it doesn’t convert into real performance.”
The technology to become carbon-neutral is already available, but putting it together and making it work effectively is the challenge. It’s further evidence of how crucial the operational side is becoming. “A building’s design could be award-winning, but then the performance is lower than expected,” says Saull. “You need to plug into how a building is actually working. You can’t just build a green building, you need to operate a green building.”
‘You need to plug into how a building is actually working. You can’t just build a green building, you need to operate a green building.’
Andy Saull, Pi Labs
The challenge for proptech companies is offering fully integrated solutions.
“Customers can get lost in the hundreds of offers out there and the multitude of technologies,” adds Plesser. “They must find what works for them.”
Digital twins – digital replicas of physical assets – can be extremely useful in creating efficiencies. They can be used for retrofitting an existing building as well as for new construction to ensure the building is as close to optimal as possible.
“We use them to define the specific functional requirements of a building and make sure everything works properly,” explains Plesser. “They didn’t exist five years ago, now demand is exploding. It’s all part of good quality management.”
Meanwhile, simple technologies can improve the energy efficiency of a building, drive performance and reduce emissions. For example, sensors that can switch off heating or air conditioning when a room is not being used.
“Both landlords and tenants must be on board because both play an active role in implementing tech solutions,” says Lukas Balik, co-founder & CEO of platform provider Spaceflow. Landlords must be proactive, with knowledge of how the space is being used and monitoring energy consumption, while tenants must monitor their employees and use the space efficiently.
There are signs that people are prepared to go back to offices if they feel they are safe. “We monitor office occupancy on a daily basis and recently we’ve seen a shift to people wanting to go back to the workplace, especially in London,” says Grant. “Some of our customers are talking about changing the way they use the office, removing desks and turning it into collaboration space.”