Technology has been a primary force of disruption across all industries, and commercial real estate is no exception. Recent years have seen an acceleration of change, as a focus on digitalisation grips the industry and adoption of more technologies becomes mainstream.
Two distinguished industry experts — essensys APAC CEO, Eric Schaffer, and non-executive director of Link Asset Management, Chris Brooke, sat down for a discussion on how new business models are emerging because of innovative building technology and which organisational leaders are implementing these initiatives.
We will like to thank Chris Brooke for sharing his valuable insights. Chris regularly taps into his knowledge on physical building access and other real estate technology solutions when providing input to the Board of Link Asset Management Limited in Hong Kong. Connect with him here.
Here are some highlights from their conversation:
Building technology is enabling new B2B2C business models, with a focus on adapting spaces to the needs of individual users
In recent years, building owners and operators have begun implementing digital access, space optimisation and energy efficiency solutions to better manage their assets. However, to further strengthen value propositions and digitally enable their portfolios, they will need to automate feedback from all users of the building to ensure that everyone gets the most out of their experience. This means shifting away from the traditional tenant-landlord dynamic to a more service-first arrangement.
“It’s no longer about property owners saying, “Here’s the building, use it”, but rather asking users what they want, and adapting the space accordingly” – Chris Brooke
In line with this transformation, more offices are infusing hospitality to create shared amenities and flexible workspaces. Likewise, residential and retail buildings are increasingly incorporating workspaces, among other points of differentiation. To accommodate these shifting dynamics, commercial real estate businesses will need to pivot away from pure B2B models to incorporate B2C elements. Success therefore relies on property owners and operators understanding each of their customers – which include the individual building users – in much greater depth.
“In B2C models, you have to know your customer. New solutions in the market can provide the technology infrastructure and data platform to help building owners take on changes with confidence” – Eric Schaffer
Through building-level data, property managers should gain a real time overview of user traffic and asset usage. This information can be obtained through tenant experience applications, IOT devices and sensors, and building management software.
With increasing amounts of connected devices and systems comes the need for simplification of network management to scale efficiently. A central solution that provides complete visibility and control of network activity and management can ensure efficient resource redirection within the building. This also allows landlords and space operators to proactively capture and respond to the evolving requirements of their tenants.
“Technology will enable the relationship to be much more collaborative. There is an opportunity for the landlord to engage the tenant in relation to how their employees are utilising the building. This could mean a tenant may wish to consider reducing their leased space, and taking up flex space in another part of the building portfolio or possibly asking the landlord to incorporate specific retail or amenity services for their employees” – Chris Brooke
Successful technology implementation requires a whole of business approach
For integrated technology stacks to be rolled out successfully and at scale, organisations will have to be prepared for challenges around change management (people, process and technology) and talent availability and readiness. Keeping pace with shifting demands requires adapting the scope of traditional functions and technology upskilling in the existing and future workforce. Furthermore, it’s not always clear which organisational leaders are responsible for sourcing and adopting new technology, and who should be leading the charge.
“This is becoming a regular agenda item at Board level alongside items like ESG and employee well-being – CEOs and senior management in leading organisations need to re-evaluate the way things are done” – Chris Brooke
To better manage digital transformation and innovation, many companies have created new roles and put in place digitalisation teams or internal task forces made up of multi-departmental representatives. These teams are often led by a Chief Innovation or Technology Officer and driven by IT personnel who have the experience and expertise in managing information, data and technology systems.
However, as real estate organisations increase their focus on data-driven decision-making and culture, both Brooke and Schaffer agreed that the traditional model of departments working sequentially within silos is not sustainable and requires a much more integrated approach, especially in Asia where companies can be more traditionally structured. Technology implementation, they insist, is a unifier of teams within organisations. For companies to be future-ready, all stakeholders have to be up-to-date with current technology solutions and trends.
“A lot of new roles and teams are being created in leading organisations. To succeed today, you’ll need a whole-of-business approach with technology front and centre to break down and then unify inter-departmental silos. This is how everyone can come together and talk about changes coming their way.” – Eric Schaffer
Technology is a key driver to customer experience in the next generation of commercial real estate
At the end of the day, commercial real estate, like any business, does well when its customers are happy with the product experience. Solutions that can provide a building competitive differentiation are increasingly becoming a requirement. Under such market pressures, both Brooke and Schaffer highlighted that building owners need to be thinking about base building designs with the user experience at its core, and which services today are tomorrow’s utilities.
The challenge ahead lies in ensuring that technology remains evergreen and continues to future-proof buildings while being adaptable to user feedback for asset enhancement projects. Brooke also highlighted that the future could bring a consolidation of various products or platforms, where landlords would look to roll out integrated solutions on an asset or portfolio basis.
“The flight to quality is always going to be there. The winners who know how to do this best will take the lion’s share”
– Eric Schaffer
This article was first published in Mingtiandi