How connected building technology delivers business value in commercial real estate
Prior to the onset of COVID-19, the top commercial real estate priorities were keeping costs down, making spaces more appealing for tenants, and meeting sustainability goals through increased energy efficiency.
Like many other verticals, the global pandemic has revolutionised commercial real estate. While the industry was already dealing with challenges including operational costs, energy efficiency and ongoing sustainability of real estate portfolios, now it must also focus on the health of building occupants and rethink how space is used. A new opinion paper from IDC explains how connected building technologies can help deliver higher real estate asset values and help manage the new challenges brought about by the global pandemic.
In a recent webinar, Carrie MacGillivray (Group VP and GM for Mobility and IoT Research at IDC), Ruud van der Sman (Sr. Smart Solutions Manager at Edge Technologies) and Schneider Electric’s Cormac Crossan (Business Developer Director of Commercial Real Estate), outline the trends they see in the commercial real estate market and how smart building platforms can help address them based on their experiences and recent research.
“Our goal is to create IoT-enabled buildings which can serve all kinds of services on top of that data — services, data sharing and data processing — those are the most important topics for us and why we have selected Schneider Electric — next to all of their capabilities, especially the data side. That’s the most important one.” – Ruud van der Sman, Sr. Smart Solutions Manager at Edge Technologies.
Evolving commercial real estate priorities
Prior to the onset of COVID-19, the top commercial real estate priorities were keeping costs down, making spaces more appealing for tenants, and meeting sustainability goals through increased energy efficiency. Presently, those priorities are all still in place, MacGillivray said, but they’re joined by three additional priorities:
- A need to focus on the health of employees, tenants and customers
- Ensuring safety and compliance
- Rethinking how space is utilised to meet social distancing guidelines
These overall drivers are pushing commercial real estate players to adopt connected building technologies that can help them deliver on these priorities. For one, the technologies are the foundation of a connected building, one that uses sensors, connects disparate engineered systems and optimises operation.
Another driver is the ability to make data-driven development decisions, helping companies to optimise new projects and adopt predictive maintenance capabilities, which leads to improved tenant satisfaction.
The third driver is a desire to be positioned as a leader in sustainable design. Connected building technologies can help companies meet or exceed sustainability goals, create sustainable urban designs and achieve long-term cost savings, MacGillivray said.
How connected building technology delivers value
IDC’s research showed that connected building technologies can deliver value in four distinct areas:
- By maximising market value: simply put, attractive properties are worth more and the kind of benefits smart building technologies bring — including improved comfort for tenants and lower operating costs — make them attractive.
- Delivering operational efficiencies: by collecting and leveraging real-time data and applying policies across buildings, companies can optimise the use of office space and electricity, while requiring fewer staff resources for ongoing maintenance. One of the survey subjects said the strategy resulted in electricity savings of 15% to 20%.
- Tenant experience: companies report improvements in measurable metrics such as tenant complaints and time to resolve issues, as well as less tangible areas such as employee comfort, which is important in terms of employee productivity and the overall customer experience.
- Green building and sustainability gains: a building’s “green” credentials such as LEED, BREEAM, WELL and others are often a clearly stated decision criteria for tenants, and can drive higher property values and rent levels.
EcoStruxure for Commercial Real Estate solutions deliver business results
For their research, IDC interviewed companies that were using Schneider Electric’s EcoStruxure for Commercial Real Estate solutions, an open IoT platform that brings together data from numerous smart building sensors and components, including lighting, HVAC, access controls, surveillance systems and energy management.
The research showed the value customers are getting from Schneider Electric’s platform, including:
- 83% fewer operational problems: getting sensor-based, real-time data meant companies could act quickly to address problems
- 11% fewer tenant complaints: not surprising given there are fewer problems
- 43% faster time to resolve operational problems: diagnosing issues more quickly and pinpointing the source of problems
- 8% higher employee satisfaction: tenants are more comfortable with office temperatures, air quality, and overall office conditions
- 18% energy-related cost savings
EcoStruxure for Commercial Real Estate: an Australian success story
In November 2020, the $200 million redevelopment of the 388 George Street building was completed, transforming the 1970s office 28-storey tower into a state-of-the-art A-grade commercial tower with a prime-new retail pavilion and improved connectivity to the surrounding Sydney CBD.
Located on Sydney’s most prominent intersection, the corner of George and King Streets, 388 George Street is jointly owned by Brookfield and Oxford Investa Property Partners (OIPP), with the redevelopment built by premier builder, Multiplex. It delivers 38,364 square metres of A-Grade commercial office space and 2,680 square metres of prime retail space to the CBD core.
Schneider Electric’s EcoStruxure for Commercial Real Estate solution provides 388 George Street with its digital backbone. The IoT-enabled solution enhances the building’s commercial property management and operation processes.
Specifically, EcoStruxure Building Advisor provides key insights into the building operations by monitoring systems and identifying faults to proactively address building inefficiencies.
EcoStruxure Power Monitoring Expert helps lower maintenance costs, reduce energy consumption, increase equipment life span, and even predict future energy consumption based on external temperature or occupancy. Integration of third-party systems such as the HVAC and electrical infrastructure were also achieved with the EcoStruxure platform.
The future of the property will see an ongoing reduction in operational and energy efficiency, and the use of the EcoStruxure platform means that 388 George Street has been future-proofed for new technologies that are introduced down the line.
Find out more
Schneider Electric’s solutions for Commercial Real Estate, are developed from a long history in making buildings more efficient, smart and connected. Backed by Schneider Electric's global teams, experts and partners can help develop and deliver innovative solutions for your complex commercial buildings projects.
While there’s no question COVID presents challenges for real estate companies, there are solutions available today to help support the rapid transition to digital while enabling greater real estate value. To learn more, visit se.com/au/buildings-of-the-future and download IDC’s report, “The Business Value of Schneider Electric’s EcoStruxure Solutions for Commercial Property.”
KNX provides over-arching control of world-class complex in Sydney, Australia, for complete...
KNX is the first and only smart home and smart building standard that meets the highest security...
ETS monitors parameters, generates security keys and safeguards projects.