We can’t afford to ignore the IoT
The Internet of Things (IoT) no longer the stuff of science fiction fantasy. It’s here, already affecting aspects of our lives. The Nest thermostat is perhaps the most popular example of this, using smart technology to learn the patterns of our lives, and adjust the temperature of our homes – by itself – accordingly.
It may yet be a while before we are living in the kind of Smart Home predicted by this video by Innovate UK, but for the commercial real estate world, IoT may arrive a little quicker than for the rest. Research by Gartner predicts that commercial property will be the number one user of IoT over the next year. Partly, this is down to the larger budgets of commercial developers, but it’s also due to the myriad benefits it offers property owners.
From a surveyor’s point of view, it’s worth getting an understanding of two major elements of IoT. Firstly, the features and benefits that smart buildings offer. With more and more developments beginning to incorporate IoT systems, the possibilities these offer will become major selling points for new commercial plots. And secondly, how to interpret the data generated by smart buildings to present to potential buyers; more accurate data allows them to make more informed decisions.
Let’s start with the benefits of connected, cognitive buildings. As with the Nest thermostat, much of the data collected is focused on making our buildings more efficient and cost effective. The various sensors all feed back into a network that essentially creates an automated, intelligent building management system.
The possibilities are close to limitless – every object within a building can be fitted with a sensor and connected to the net. The information this then relays back to the owner in a very specific way. In a shopping mall, foot traffic can be measured to assess where the most profitable areas of the mall may be. In an office space, machine learning can help decipher spaces where employees are more productive, and design work patterns to facilitate more productive working. In a block of residential flats, alerts can be sent to a landlord when maintenance is likely to be needed, improving relations with tenants and securing longer occupancies. It’s also estimated that smart energy systems can reduce costs of running a building by up to 30%.
Knowing the IoT features of a building and the potential benefits for investors will become an essential selling point as IoT becomes more commonplace in commercial property developments. This infographic from a Deloitte University gives a great overview of how IoT might be used in different types of buildings.
Another factor that will assist in sales is the fact that data collected by these smart buildings will give buyers a far more comprehensive picture than ever before of the investment they are making. Whether they are looking at a development plot or a pre-existing building, investors will have access to information such as traffic, crime, footfall and several other factors to help them make more accurate decisions.
Presenting these figures, and comparing them to other similar properties on the market will enable more informed purchases, for fairer prices. This has the potential to smooth the negotiations involved in buying or leasing a property – the ready comparisons in the market show what the property should be selling for, in a far more robust way than simply by postcode.
Understanding which data sets are most important for which types of commercial properties will allow surveyors to provide clients with more accurate and directly useful information.
There is even a suggestion that at some point in the future the very data collection capabilities of buildings will become valuable in themselves – that investors won’t just be buying the buildings but can use the data they collect to generate additional revenue streams. Not everyone agrees with this, and the privacy issues involved naturally raise important questions.
One thing is for sure though – the IoT is here and it has the potential to change commercial property sales in a big way.