Valuing the data elephant
In real estate, where the ‘cash cow’ of the physical asset is still healthy, there is a reluctance to acknowledge the presence of the digital asset and what it could mean in the future.
1 OUT 2018
The Internet of Things (IoT) is a peculiar phrase with an even more peculiar history. It is used to describe ordinary static devices that are hooked up to the internet. Traffic lights are connected so city planners can alter the timing from the comfort of their control centre. Rat traps laid in supermarkets are connected so that the pest team is alerted when a rodent has been caught. Useful examples, both.
Then, IoT went a little bonkers. We had kettles that could be boiled via an app. A connected tennis racket that reports on backhand velocity. Pretty soon the industry was being mercilessly satirised. The Tumblr blog “We put a chip in it!” tracks the daftest innovations. Examples include a nappy that tweets when soiled, and Peggy, the clothes peg that tells you when your laundry is dry.
Now the building world is getting the IoT treatment. Buildings are rigged with sensors to track occupancy, temperature, humidity and anything else desired. To add to the sense of momentum, the explosion in IoT is being linked to another burgeoning field: big data – the act of searching vast pools of numbers for hidden patterns.
So what implications does the growth of IoT and big data have for facilities managers? Are we on the cusp of a new era, or just more novelty nappies?
So what implications does the growth of IoT and big data have? Are we on the cusp of a new era, or just more novelty nappies?
There is no doubt that there have been some success stories. Artificial intelligence developer DeepMind is a great example. DeepMind’s AlphaGo program beat Europe’s best player of the board game Go in 2015 and the company was then bought by Google for $400m. It took a look at its new owner’s data centres. By analysing trends in consumption, DeepMind found a 40% energy saving.
The Edge, an Amsterdam office developed by OVG Real Estate and designed by London-based PLP Architecture, is fitted with 28,000 sensors that track desk usage, power consumption, water, meeting rooms, temperature, and coffee consumption. Using data to allocate space allows its occupier, Deloitte, to share 1,000 desks between 2,500 workers. At the end of the day, cleaners focus on the areas used most during working hours. The bathrooms report when they need attention. The use of sensors to vary air-conditioning and lighting cuts energy usage by 70% over a typical office. On its completion, the environmental ratings agency BREEAM gave the Edge its best-ever sustainability score of 98.4%.
“We should be very excited,” says Owen King of workplace consultant Unwork, and author of a report on the subject called Workspace Reworked. “Smart buildings use technology and data to capture information, to optimise operations and to save energy. It will change the job description of facilities managers.” King believes the improvements brought by IoT justify the hype: “Look at the gains DeepMind produced at Google’s data centres. I had to check those figures several times because I didn’t believe them.”
The growing catalogue of success stories seems to justify his enthusiasm. Microsoft used its office in Copenhagen to test IoT theories. Engineers at ABB fitted a KNX building control system with thousands of sensors to track temperature, air quality, and lighting. KNX is a worldwide standard for home and building controls, which allows sensors from various manufacturers to be used on the same network. “Sensors in a building are combined with actuators, which change the levels of lighting, heating, audio and blinds, as well as routers to connect to the internet and controllers,” explains Dean Reddy, building automation engineer at ABB.
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“Depending on its size and complexity, a building can contain hundreds of devices including sensors, actuators, routers and controllers,” says Reddy. “Our sensors can monitor anything from lighting, temperature, air quality and fault monitoring to blind, curtain, door and window positions, whether a room is occupied, and the weather. In the future, we’re looking to add sensors that recognise and track multiple building occupiers and sense gesture commands that control lighting with a sweep of the hand.”
Facilities managers can decide on which outcomes take precedence, Reddy adds. “Our customers want a balance of economic efficiency, flexibility, comfort and security. The prime concern varies between customer. For example, a hotelier’s priority tends to be comfort, whereas low energy bills and security issues are important for an industrial operator, airport, hospital or school.”
This tech revolution is not just limited to the devices, either. The software packages that present the information to facilities managers are well designed and easy to use, freeing them from the nightmare of Excel spreadsheets. Dassault Systèmes, for instance, has rigged the LifeCycle Tower One building in Dornbirn, Austria, with sensors connected to an IoT cloud, and plugged into a 3D model. The building manager is given a simple colour-coded interface for controlling the building. For example, occupancy levels are shown on a heat map, with red for high usage. Tenants in a red zone can be offered more room. Maintenance is automated: a dead bulb shows up immediately on the model.
One factor that could add rocket fuel to the IoT-buildings industry – in the UK at least – is the introduction of minimum energy efficiency standards (MEES). The legislation demands that all commercial properties have an energy efficiency rating no worse than “E”. MEES: The Implications for Rent Reviews, Lease Renewals and Valuation, a report published by smart building consultant Arbnco in April 2017, suggests that 19% of all commercial property is currently not compliant. This equates to £165.5bn of real estate that will need to be upgraded by April 2018, when the standard will apply.
Perhaps an IoT refit might help. M&G Real Estate has been working with Arbnco to cut energy usage across its UK managed portfolio. Using the consultant’s cloud-based Carbon Estates software, M&G has “achieved a reduction in energy intensity of 16% over four years”, says Arbnco chairman and CEO, Maureen Eisbrenner. “One particular project, a large shopping centre, has shown energy reductions of 23% after two years.”
A key issue for most occupiers and landlords is the “energy gap”. Buildings often consume far more energy than theory would suggest, and sensors can help to identify the problem areas. “The software provides the ability to manage the buildings in near-real time,” says Eisbrenner. “Essentially, one person sitting behind one computer could manage an organisation’s complete estate on one platform.”
The cost of introducing the sensors to buildings is low. There are dozens of creative start-ups in the field offering connectivity. Office App won investment from Property Innovation Labs, which nurtures creative companies operating in the building sector. The app uses plug-and-play sensors costing £50 to £100, with one needed per room. Office App can track room occupancy, printers, temperature, humidity, and coffee machines. The building manager can scan all the stats on a smartphone.
Overall, it is a powerful equation. Sensors give managers round-the-clock visibility of their estates. They can help lower utility bills and manage space. The installation overheads are low. And even the software is user-friendly. The internet of things was initially mocked for over-promising in the consumer space. But, facilities management is shaping up to be the industry where the technology can really prove its worth.