Prop Tech is slowly emerging. How smart is your building?
Over the last 5 years there has been an increase in property tech but unlike other tech sectors it has been slow to fully take off.
Part of the problem seems to be that it is harder to make buildings more intelligent where there are multi-let spaces and so changes are happening piecemeal with significant change unlikely to happen until there are major refurbishments or until a landlord takes full control of the building.
It seems that most of the current demand for PropTech centres around efficiency, with a quick easy win for Landlords being the installation of smart meters, as many occupiers want to monitor their energy consumption with a view to becoming more sustainable.
Most in the sector realise that getting the key infrastructure right is at the heart of making buildings more intelligent. And many now expect landlords to take responsibility for providing fibre and good quality WIFI in their buildings.
The slow uptake for PropTech is also linked to the need to have a business case that matches the investment required in such technology. In terms of who pays for such investment, it is likely to fall to the landlord. In the current climate with a likely over-supply of offices then those with tech are likely to be more attractive and therefore investment now is important. However, landlord’s will worry that with many tenants struggling to pay their rents in the current crisis they have less money than ever to invest.
The alternative is to charge the tenants higher rents for their higher tech spec, but will tenants be prepared to bear that cost? It depends on their perspective. Although rents may be higher, if a building is more efficient overall then the service charge costs should be lower and so these savings could balance out any increased rent.
As mentioned, many tech advances in property rely on the infrastructure being right with most of the solutions relying on sensors which can be designed/installed to be removed and replaced as and when the technology changes. As to what such sensors can be used for this could include:
Activating lights according to physical presence
Delivering fresh air only to those parts of the office where it is needed
Monitoring air quality
Using heat sensors to direct cleaners to those areas which have been used
Covid-19 – it could be used to show clusters of people to allow changes in office design and space to allow for social distancing.
Ultimately, the success and popularity of PropTech is still to be fully seen and is likely to depend on users being comfortable that it can be integrated effectively and cheaply with full transparency around data collection.