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Smarter use of data is poised to transform the 100 trillion-dollar property industry

It’s the stuff of sci-fi movies. The buildings that recognize you as you enter. The control panel commanded by the sound of your voice. It’s a vision that very few of us have experienced in real life, but it’s a reality that, according to Canadian real estate giant Oxford Properties Group, isn’t all that far away.

It's one of the last industries to be disrupted by tech

Oxford Properties “builds, buys and grows some of the world’s most transformative places and real estate businesses”. The company has put digitalization at the top of its agenda, as a means to revitalize an old and traditional industry, one that still predominantly runs on manual processes and paper. But as buildings grow increasingly complex, so do people’s expectations for those buildings’ capabilities and environmental impact.

Two self-proclaimed ‘odd ducks’ in the property industry, Dean Hopkins and Anushka Grant of Oxford Properties Group, talk about the future of the buildings that we live and work in, and the role digitalization is playing in shaking up an industry that is one of the last to be disrupted by technology (interview follows): 

Images: Dean Hopkins is EVP and Chief Operations Officer for Oxford Properties. He came from the tech world into real estate two years ago and has been eagerly reimagining what a real estate company is ever since. He’s joined by Anushka Grant, the VP Business Transformation and Platform Services for Oxford. She’s been dedicated to driving change in the real estate business for much of her career. Above: Oxford Properties' Sony Center in Berlin, Germany. Both images courtesy of Oxford Properties.

A demand for digital buildings?

Thanks for talking with us, Dean and Anushka. We’re curious, is digitalization directly contributing to the value of the buildings you own and operate?

Dean: As part of the OMERS Pension Plan, our overarching goal is to pay pensions by enhancing the value of our buildings and businesses. Part of increasing their value is to inject digital value into our buildings. This is about giving our buildings digital capabilities so that they are more efficient to run, uses less energy, and offer more creative options to customers. All of this serves to reduce the risks, lower the costs, and create the ability to monitor the building more closely to detect if something is awry, before it becomes an issue.

Is there a demand out there for more digital buildings?

Anushka: We definitely see an increase in customer expectations, from the end customers who walk through our buildings to the employees or occupiers who are telling us they want more digital solutions. They are asking for insights into the activity within the building; they want to see stats on performance, view air quality levels, and even see how space is used with real-time visualization. Customers want to make the best decisions for themselves, and to do so, they are turning to data. The most sophisticated occupiers are even looking to integrate our buildings into their technology environment to ensure a seamless, end-to-end, employee or customer experience.   Buildings that aren’t able to accommodate this, will become less valuable over time.

Image: Hudson Yards in Manhattan, New York. Courtesy of Oxford Properties.

How not to lose data, and with it, lose value

Image: The 388 George Street development in Sydney, Australia. Courtesy of Oxford Properties.

The energy industries are on their own digitalization journeys, and working to transform their entire operations, asset-by-asset, but also holistically. Is this applicable for the property industry as well?

Dean: Absolutely. Oil platforms are essentially like buildings on water. Both generate massive amounts of data from different systems inside, but until recently this data fell into the gutter on the street. It was lost value pouring out of us. This is ridiculous, and in our view of the future, we should be managing the data with a clear perspective on it and be able to innovate with it.

Why is this easier to collect and use the data now?

Dean: Today we have the start of a better mousetrap, so to speak, when it comes to data. The tools now exist to allow us to cost effectively gather, understand, analyze and act-on data from any building anywhere.  This has the potential to create a moat for us in the industry, whether it’s about properties, investment opportunities or customers. We see the ability to use data in novel ways, transforming us from a reactive to a proactive industry.

As a part of being a more proactive industry, is sustainability more of a factor?

Anushka: Environmental, social and governance (ESG) criteria are definitely factors, and we’ve worked hard to take an industry-leading approach to carbon reduction. By 2025 we will have reduced our carbon emissions by 30%. This is so important to us because our business is tied to the health of the communities in which we operate and the planet on which we live.

Tech is making energy, manufacturing, and property much smarter

How does use of technology or data result in more sustainable buildings?

Anushka: There are so many use cases, from more efficiently operating buildings, to improving tenant engagement, to managing the buildings’ climate and the carbon emissions. However, until recently most efforts were focused on optimizing single systems within a building (such as heating and cooling). This meant the benefits from the complexity of the building were left unaddressed; challenges such as how heating and cooling vary with occupancy or the weather. Technology has now advanced where we can start to unlock some of that value by understanding how the pieces work together. The genuinely exciting part is that we can set targets and then advance the achievement of these targets once we have the multiple systems in a building brought together.

We too are strong proponents of bringing systems together to extract and use the data. But how do you do this in an old building that simply wasn’t built to be ‘smart’?

Dean: This is what the business calls the ‘brownfield’; existing buildings that were built in the past, often with older technology (or none at all) and which represent the majority of the existing stock. Every building is unique, it has its own fingerprint, and is filled with proprietary systems powering individual systems like lighting, electricity, and elevators – systems that simply don’t talk to each other. Technology providers are rapidly converging on this problem, including looking at how the same issues are being addressed in adjacent industries like oil platforms and manufacturing plants.  Moving from analog, disconnected buildings to digital, connected buildings is one of the most significant trends to watch in the next five to 10 years, and will help us create a tremendous amount of value.

Images: The Stack high-rise development in Vancouver, Canada. Rendering of St. John's Terminal in New York, USA. Courtesy of Oxford Properties.

Wanted: People, skills, industrial collaboration

But with an entire building connected, how do you keep it safe from new vulnerabilities?

Dean: Cyber security is really the catalyst for us to do any of this. We can’t reinvent the digital capabilities of a building without a strong and secure foundation. That means that to bring the creative and innovative solutions to the building, we must be robust at our core.

What’s the single most important thing to make your vision of a digitalized building future a reality?

Anushka: People and skillsets is critical right now, because even in the asset management business, people are our greatest asset. We need to start by building capabilities in our people, so that they can operate the technology and extract the benefits. We can’t rely on intuition and gut feel.. We need to use the data to make smarter and more sustainable decisions.

Dean: I would add that industry collaboration is essential. This is not a future that Oxford Properties Group can design and deliver alone. We need global collaboration between players to make every aspect of our industry more streamlined, injecting the right skills and the right technology so that we don’t end up in different places. And if we manage that, I’m hopeful that our industry can do its part to leave the world a better place than we found it.

Here's how other industry leaders are making data do more

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