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Leaders' Forum 19th February 2024

As Workman celebrates its 40th anniversary, leaders of the firm share their plans and vision for the future, within the UK’s rapidly evolving property industry.

Here, James Hallworth MRICS, Partner, and the firm’s Head of Building Technology, outlines the challenges and opportunities presented by today’s commercial real estate market.

What do property investors want from Building Technology, and how can it solve their business problems?

In its early days, Building Technology was very much geared towards improving engagement between landlords and occupiers. It’s moved forward quite dramatically in the past five years.

One of the key trends driving this transformation is the increasing emphasis on energy efficiency and sustainability. The use of Building Technology was accelerated by the energy crisis, and with it came the leap in importance for optimising how buildings are running, and ultimately delivering energy savings.

Today, Building Technology is about finding ways of reducing carbon, improving how a building is running, optimising it and therefore reducing costs. What’s more, there’s an intrinsic attraction for new occupiers who are willing to pay a green premium for buildings that operate efficiently and enable them to meet their own ESG goals.

What are the latest achievements for IBOS, and why is this important to investors?

Our intelligent building operating system (IBOS) is already playing a pivotal role in optimising energy consumption within buildings, analysing data and automating systems for maximum efficiency. IBOS has already been installed across more than 5 million sq. ft of commercial property space, with a further 1 million sq. ft in progress.

Clients adopting the technology include Blackrock, Columbia Threadneedle and Federated Hermes. Across properties where IBOS has been installed, average reductions in energy consumption of 20-40% have been recorded within the first 12 months, and a return on investment typically delivered within three to six months.

IBOS typically takes around one-to-two days to install, with data accessible in less than two weeks and energy savings of at least 15% usually identified within the first three months. Now installed in more than 60 buildings across the UK, the system has proved commercially viable in spaces as small as 3,600 sq. ft, as large as 1,000,000 sq. ft, and in vacant and fully occupied units. It can also be installed across portfolios as well as individual properties.

During this period of heightened sales activity, being able to demonstrate that a building has reduced its energy intensity by utilising this technology has been really helpful for sales processes, because buyers can see what they’re getting.

How could efficiencies be further improved by Building Technology?

From smart lighting and HVAC systems to advanced waste management, buildings are set to become ever-more environmentally conscious and cost-effective.

The integration of Internet of Things (IoT) devices will be another hallmark of Building Technology’s future. Building sensors and connected devices will create a network of information, enabling real-time monitoring and predictive maintenance. This proactive approach will not only enhance the overall safety and security of buildings, but will also reduce operating costs by identifying potential issues before they escalate.

Beyond that, the next big shift will come from sharing metering data between occupiers and landlords. Securing the necessary tenant engagement to share data is slowly improving, but for real change, there needs to be a legislative requirement that metering data is public. Many European markets, such as France with its OPERAT system, already take tenant data into account.

How has AI changed the outlook for building tech, and what is on the horizon for 2024 and beyond?

The buzz around AI has exploded, not least in the property sector. But there’s a lot of overclaim: true AI building operation isn’t quite there yet.

What we are currently seeing is the use of algorithms based around weather data making the building react to predicted conditions. In reality, a building management system can already do that to a certain extent.

The industry is currently harnessing machine learning, automation, and algorithms. True AI would mean a computer making its own informed decisions, based on building systems, the fabric of the building, temperatures, current and predicted weather conditions, how many people are in the building, what lease events are coming up in the building, how vacant is the building… That level of all- encompassing AI simply isn’t there yet.

But what we can do now is utilise AI to make certain operations more autonomous and to link systems together to make informed, expert, *human* decisions on what the building is doing all the time: we call this Intelligence Automated.

What about the use of AI in property management processes?

I expect to see a lot more AI integrated into property management. But we should always challenge, and apply human checks. This is why we need talented people who are skilled in facilities management and property management, who know how a building works, to ensure that tech isn’t being used in the wrong way while still providing a human face in the building.

I think what we’ve all learned from call centres and chatbots, and from the Covid period, is that we enjoy human-to-human interaction. So, the question is how best to utilise AI to allow our skilled people to spend more time on the ground providing a face-to-face personal approach, and less time completing the admin and process tasks.

Our Welcome Offices service responds to the increasing hotelification and personalisation of the most desirable workspaces by providing a professional human approach; so the last thing we want is to reduce opportunities for human interaction within the buildings we manage.

Why are experienced property professionals integral to the development of Building Technology?

Ultimately, it’s very rare for software specialists to have an intrinsic understanding of how buildings work. There so many different facets and inputs into what property managers do. From facilities management to ESG to M&E to controls specialist and engineering knowledge: it’s about deploying all of that knowledge into the technology, and then layering the vital element of customer service which underpins all of it.

Having said that, as building consultants and property managers, we’re also very good at understanding when to call upon assistance from other professionals when we need it. To create the most effective Building Technology, we are constantly drawing on knowledge from many different areas, to make sure that we’re providing the right service and the right technology, not just a software solution or a nice-looking app platform; it’s got to deliver meaningful bottom-line results.

What are the next-level developments in Building Technology?

Occupier experiences will be elevated to new heights through personalised and responsive technologies that are being implemented beyond workspaces.

Across retail and leisure spaces, residential build-to-rent accommodation units and later-living homes, intelligent proptech is transforming buildings into smart, responsive entities, creating an environment that seamlessly aligns with occupier needs.

As buildings become smarter, more efficient, and tailored to individual needs, the integration of AI, machine learning, IoT and intelligence-automated technologies promises a future where the places we live and work actively contribute to a sustainable and connected urban environment.

Find out more about Workman Building Technology.