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Smart buildings: Technical and legal challenges

What are the technical and legal challenges developers will face from the smart building trend?

Digital technologies are already disrupting long-established real estate business models.

Smart buildings – construction technology that permits the gathering of data in a space for commercial benefit or efficiency gains – are at the forefront of such disruption.

However, while we have barely scratched the surface in realising the economic and environmental gains that will be possible in the smart building era, there needs to be significantly greater understanding of these technologies among those working in commercial real estate and by developers themselves.

A significant component of increased use of technology in the physical construction of buildings includes much more than use of sensors and integrated control systems.

Our recent report, The New Real, is also about the interaction between such systems and wearable devices, personal mobile devices, and other information systems in the public environment in which buildings exist.

Increasing data

The most significant transition this trend represents is buildings moving from being relatively data-poor environments to becoming data-rich.

As new ways of working become more and more mainstream, investors and developers need to rethink traditional ways of delivering and managing space and look to new revenue streams, such as delivering technology requirements and hospitality services, to sit alongside conventional rental income streams.

In large retail centres, for instance, it is increasingly possible to capture and integrate data about where, when and how consumers shop, enabling retailers to tailor advertising, opening hours and store location, among other things.

“The race to achieve competitive advantages has profound implications for all industries involved in this sector – including the contractors designing and building the smart buildings of the future”

New revenue models are not the only source of value. By better understanding how and when they are using their workspace, companies can reduce energy costs and cut down on surplus floor space.

Identifying genuine space latency becomes much easier when you have more incontestable data on people movement, occupation and space use. In addition, mapping productivity data against environmental conditions – such as temperature, light intensity and air quality – can drive a more productive, healthier workforce.

The race to achieve these competitive advantages has profound implications for all industries involved in this sector – including the contractors designing and building the smart buildings of the future.

Five key trends for UK contractors to look out for would include:

  • Smart buildings are driving gains stretching far beyond sustainability. While many firms are still striving to cut energy costs and optimise asset performance through smart building management, the most forward-thinking players are already imagining entirely new gains from the smart environment. As commercial buildings become omnipresent sensors of activity, sophisticated analytics will deliver new insights to improve the productivity and wellbeing of the workforce.
  • Future-proofing means in-built flexibility. Too much bespoke customisation in construction may leave buildings unattractive to future tenants who want to integrate their own technologies with ease. The key to future-proofing will be the design of flexible shells, and easy access to rewire and retrofit as new technologies come along.
  • Winning the battle against obsolescence will be pivotal in securing returns. Replacing vast amounts of existing building stock will be impractical because of the cost and high carbon footprint involved. As occupiers demand digitally enabled buildings with high energy efficiency, owners must upgrade properties to remain attractive. As of 2018, it will actually become unlawful to let commercial properties with an Energy Performance Certificate (EPC) rating of F or G.
  • Innovations in construction will deliver more than just hyper-efficiency; they’ll be crucial in driving future adaptability. Advances in construction, such as offsite fabrication, will be increasingly important in enhancing efficiency and lowering the cost to build. A more modular approach will also make buildings easier to repurpose further down the line, allowing owners to adapt them to occupiers’ evolving needs. Meanwhile, building information modelling and 3D printing will enable more innovative designs.
  • Smart gains will need to be realised through new partnerships and new networks. No single organisation can tap into the full potential of a truly smart built environment. Contractors may need to work with workplace strategists and innovative technology experts; firms providing smart building infrastructure may need to tap into the data analytics knowledge of consultants — such as in Siemens’ partnership with Capgemini.

David Savage is partner and head of construction and infrastructure at Charles Russell Speechlys

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