No doubt this is true, but the argument could stand to be updated in light of more recent developments. Legacy building control systems, and even more modern building management systems, are expensive for commercial building owners and operators. But the advent of affordable sensors, among other things, means that we can now optimise building performance more easily and more affordably than ever before. Modern smart infrastructure combines the Internet of Things (IoT), wireless communications, big data and cloud-based algorithms to make buildings smarter, more efficient and safer for occupants.
Fully optimised buildings will have reduced operational expenses (the main reason for this will be increased energy efficiency), but in the round they will also secure net positive returns for real estate holders, from investors to owners to brokers to occupants. In combination, these annual savings on energy, and long-term returns on capital expenditure, should make building optimisation a top priority for property developers, even leaving aside the ‘soft FM’ concerns of occupant attraction and retention.
For office space this is crucial: perhaps the greatest added value of building optimisation is the improved end-user experience with healthy, comfortable, and productive environments for workers and ease of management for owners/operators. One of the key concerns for facilities managers and building operators is to attract the best staff: safe, sustainable built environments are of course more attractive to modern workers. (For more information on the health benefits, see our white paper on occupant health and wellness.)
For residential buildings the same could be said: modern tenants expect control, personalisation, sustainability, and connectedness. All these things increase the value of the property as a rental proposition, and tend to reduce churn rate: in other words, renters will pay more and stay longer in a property that has been designed, from the start, to meet their needs. Especially in the higher end built to rent environment, IoT-enabled personalisation has a raft of benefits, with environmental controls often available to occupants over an app.
In short, it will add lasting and differentiated value to the building, leading to higher return on tenant improvement investments. It will also offer higher returns on common area management investment. But perhaps most importantly, it will ensure that building operators are prepared for changes to the carbon tax regime that will come into effect, with increasing drama, over the coming years: for more on this, see our new white paper on carbon reduction. Briefly, we forecast tightening legislation around carbon reduction, and encourage developers to plan for uncertainty: the best way of doing this, of future-proofing asset investments, is to design and spec IoT enabled integration.
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