Ongoing digitization has spurred significant demand for connected buildings around the world, and Australian developers are rising to the challenge. In recent years, the country has become a leading force in the development of smart-building complexes.
In large part, that’s because Australian workers expect advanced digital services, thanks to the high adoption of alternative workplaces such as activity-based working. At the same time, the highly securitized commercial-property market has resulted in long-term hold strategies that demand yield performance. Investment managers are focused on bottom-line returns, of course, but they also understand the value of being sustainable.
However, smart-building projects like those Down Under will not guarantee above-par results without first garnering a clear understanding of business requirements and goals. As market leaders move to embrace smart initiatives, developers, owners, operators, property managers, and investors must move to understand the importance of developing a coordinated strategy across a portfolio of properties to deliver on the experience demanded in today’s connected world.
The way to most effectively achieve smart building ROI is by starting with an Intelligent Space (IS) strategy. Intelligent Spaces use technology to realize outcomes and drive interactions, not only within the place but also with the people moving through the space and its purpose. The emphasis on people, place, and purpose—the 3P model—is what differentiates intelligence from mere smartness.
Developers first need to determine the level of intelligence each individual property requires. There is no one-size-fits-all solution, so owners and investors should match the underlying technology platform to the requirements of each development.
One variable, for example, is that tenants and customers will have different expectations based on location. They will assume that a premium-grade asset in Sydney’s central business district (CBD) has a more advanced level of intelligence than a B-grade asset in the suburbs. A-grade CBD buildings attract sophisticated tenants with high expectations of an optimal digital experience. These organizations typically have a higher adoption of alternative workplace solutions and co-working spaces, which offer robust technology services that are interactively integrated with traditional building systems. Facilities must be smarter to compete.
It’s also essential to factor in the preferences of tenants who occupy the buildings. Today, digitally adept Millennials are the largest generation in the workforce, and their technology expectations have become mainstream. Yet, they will soon be eclipsed by even more technically sophisticated Gen Z workers, who will expect to be better connected, coordinated, and orchestrated. Companies competing for the talent of the future must offer intelligent workspaces that meet the preferences of these truly digital natives.
One of the recent examples of a smart development is Barangaroo, a meticulously designed 54-acre complex overlooking the Sydney Harbour. The $6 billion urban-renewal project is being developed and built by Lendlease, a multinational property developer that is headquartered in Barangaroo. It’s a complex of state-of-the-art smart buildings that include three main commercial towers, three 10-story residential buildings, and several multi-use buildings.
The buildings are all interconnected by a high-speed fiber-optic infrastructure that supports the needs of business tenants, retailers, restaurateurs, and the public. Barangaroo’s building systems are based on Open Building System Integration (OBSI), which enables tight integration among systems and business processes across buildings, tenants, building-management teams, engineering, and commissioning teams and contractors. More than 100 unique stakeholders use the system daily to manage, monitor, and run analytics on mission-critical processes and data. The technology can be configured for individual login restrictions and user-access policies.
What differentiates Barangaroo is that Lendlease designed and commissioned the waterfront complex to operate, rather than leaving it to the facility managers to figure out how to operate the buildings. Following a “Design to Operate” model, intelligence was factored into the early stages of the project, and the operations teams were involved in the design in the early stages as well. This approach is moving toward the 3P model—people, place, and purpose—to make an intelligent building effective from day one. Lendlease also ensured that property managers understand the technology and how it works.
But what really makes Barangaroo stand out is that is the building-management technologies are effectively integrated with the tenant systems, providing a tightly integrated, single access-control ecosystem. In other words, the tenants’ business processes now are integrated with the BMS, with the expected outcome of greater tenant retention. This was no accident: Lendlease developed Barangaroo using a strategic approach to intelligent-building thinking.
One significant challenge facing developers is that a standard language and framework for smart buildings does not yet exist. To bring clarity to the lexicon, we developed an Intelligent Space (IS) Framework that classifies smart buildings in five levels according to their degree of sophistication and intelligence. The framework gives a ready measure for how smart a building is and a yardstick for owners and developers to apply when designing buildings or precincts. Underlying the framework is a clearly defined set of measures and outcomes that are used to test the IQ of a building.
Characteristics of the five levels include:
Sense & Inform: Level 1 (IS1) is the basic layer of Intelligent Space in which connected sensors and devices provide feedback and information. Typical capabilities of IS1 facilities include collection of relevant data like the physical environment and foot traffic. What’s most notable about IS1 is what it lacks: A closed loop in which the building responds to a trigger, event, or sensor.
Sense & Direct: Level 2 (IS2) spaces offer direct assistance with human activities like wayfinding and room booking using apps and interfaces. The IS2 level does not require a considerable investment in technology. Instead, it uses simple orchestration to map information to specific action.
Sense & Control: Level 3 (IS3) is typically the minimum desirable level for high-end CBD assets. Controls, processes, and workflows are orchestrated to automatically transmit instructions to the integrated technologies and mechanics of the building. An IS3 building, for instance, can respond to actions related to primary mechanical and electrical systems such as lighting and HVAC. The hallmark of an IS3 development is its ability to orchestrate responses across systems that were previously unconnected and required human intervention.
Augment Business Process: Level 4 (IS4) intelligent buildings use predictive data and analytics to embed and support business functions and processes for tenants or occupants. For example, when new employees arrive on their first day of work, the technology provides seamless entry to the facility and access to their desk, as well as business systems and applications. IS4 buildings also offer services like preventative maintenance that can help commercial real estate firms retain tenants and minimize operational costs.
Enhance Business Mechanism: Level 5 encompasses cutting-edge technologies like artificial intelligence (AI) and robotic process automation to support and deliver the highest level of services. Intelligence and algorithms can help optimize the use of space, while analytics on tenancy footfall and room usage can reveal actionable patterns of behavior. IS5 facilities also align people and time. Meeting rooms, for example, are not booked; rather, they are allocated to the interaction needed.
As we have seen with Barangaroo, leading property companies in Australia must ensure that the human element of smart building design is not subjugated to technology. What’s needed is a holistic, human-centric strategy that carefully integrates digital services and facilities. Beyond putting people first, while many developers and vendors across the globe are touting their smart-building capabilities, very few have built in intelligence on a large scale across properties. And yet that’s exactly what up-and-coming workers and consumers expect in today’s increasingly interconnected digital world.
The starting point for any investment in building technology is to know what you are trying to achieve and why. Companies that successfully navigate investment options to drive real outcomes typically follow a clear strategy. They also start the discussion on desired outcomes at the concept stage and focus on the operation of the building as early as practical.
To get there, developers must embrace change as an opportunity—not a threat. Intelligent Space strategy can help improve the efficiency and effectiveness of facilities in the areas of design, construction, management, and amenities. A focused strategy helps ensure that smart-building investments result in real value, spark innovation, and deliver new levels of intelligence. When developing an Intelligent Space strategy you must understand the current state of your digital assets and processes. Using CohnReznick’s Intelligent Space Framework is a fast, efficient means to get there. Doing so will determine how your smart assets would fare across a smart building spectrum —and then help graduate your properties from smart to truly intelligent.
This content was produced in collaboration with Realcomm and originally appeared on RealcommEDGE.
Ross Miller is a thought leader in the intelligent building space and has advised real estate investors for more than 25 years. He is Chief Executive Officer of the Asia Pacific region for CohnReznick Australia Pty Limited, a subsidiary of CohnReznick.
Vincent Dermody develops smart-building strategies for real estate developers and owners. He is a Managing Director of CohnReznick Australia Pty Limited located the Asia Pacific Region Vincent has been instrumental in developing Smart Building strategies for commercial real estate firms.
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