There are reputedly now more than 10,000 proptech products across the built environment sector.
Faced with such a bewildering variety of products, many of which claim to address the same challenges, it’s perhaps not surprising that many office landlords, property managers and occupiers are paralysed into inaction when it comes to choosing tech that will provide value.
A recent survey of workplace stakeholders showed that while 92% believe proptech will play a key part in the future of real estate, only 33% have implemented one or two tech solutions.
The survey, which audited more than 5m sq ft of commercial real estate over the past 18 months, recorded an average score for tech that had been implemented - and also the processes in place for its effective use - of only 37.5 out of 100. This indicates the disconnect between the potential of tech products and their actual application.
Against this backdrop, there is confusion as to who should be responsible for implementing the tech that can benefit landlords, occupiers and property managers.
Landlords often believe the the primary responsibility should lie with occupiers – and they should also bear the cost of implementation. Conversely, occupiers feel that in today’s working environment, landlords need to set a tech framework that enhances the occupier experience and improves a building’s operational efficiency.
Caught in the middle is the property manager, who while not mandated to consult on the application of tech, is increasingly asked for data that feeds into a building’s sustainability – and, by extension, the building owner’s environmental, social and governance (ESG) credentials.
Because they regularly talk to landlords and occupiers, property managers can play a key role in bringing consensus to the tech conversation. Whether they can or should be put in charge of tech selection is a different question; it seems inappropriate to ask them to do so unless it is already in the scope of their engagement and fee base.
As tech becomes more central to buildings’ efficiency, managing workplace patterns and meeting new occupier demands, knowing how far to go with implementing tech has become a conundrum for developers. They don’t want their buildings to be ‘off the pace’ in terms of tech, but conversely, they don’t want to spend substantial amounts on deploying systems that may have marginal value for the ultimate occupier.
There are very few areas of smart building tech where there is a clear ‘winner’, so a very considered approach is required when a landlord, occupier or property manager is selecting the tech to meet their requirements.
There can also be concerns about the tech providers’ corporate strengths; you don’t want to commit to a system, only to find out in a year’s time that the provider has gone bust and there will be no support, updates or product research and development. This inherent risk, together with shorter leases that bring new occupiers with varying requirements into buildings, makes tech implementation and return on investment calculations increasingly difficult.
The lynchpin in this scenario is data that can be analysed to define the efficacy of tech, what it is returning to the bottom line and how it can also support the ESG credentials of property providers and users.
By aligning the interests of landlords, tech providers, occupiers and property managers, the true potential of smart building technology can be unleashed and can create a thriving ecosystem where innovation flourishes and the benefits – cultural and financial – are shared by all.
Freddie Pritchard-Smith is a founder of proptech consultancy Trustek