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Real Estate

The quiet tech revolution delivering ground-breaking results for real estate

By Daniel Lepore
Head of Asset Technology Sydney, Australia

In the decade since Netscape founder Marc Andreesen said software would eat the world, the statement has become somewhat of a truism in most aspects of our daily lives. The real estate industry is no exception.

Buildings that were once solely attended by a team of human security, maintenance and cleaning staff are now leveraging sophisticated artificial intelligence (AI) applications and sensors to help streamline their operations.

It has been somewhat of a quiet revolution, but the roll-out of software and AI systems into the real estate industry is delivering ground-breaking results for landlords, investors and tenants – and changing the way real estate is managed.

Improving ESG a key driver of change

One of the key drivers of change has been a desire from investors and tenants alike to improve their buildings’ sustainability on a range of environmental, social and governance measures – most notably through reducing real estate’s carbon footprint and energy usage.

Traditionally, reducing the carbon impact of a building has been a manual affair – lowering the air conditioning, turning off the lights after closing time, encouraging recycling and ensuring space is being used efficiently.

But modern buildings are deploying new AI technology to supplant and improve the role that conventional automation and facilities management once played. Autonomous heating, ventilation and air-conditioning (HVAC) controls are a leading example.

Autonomous HVAC technology a first for commercial real estate

Heating, ventilation and air-conditioning are among a building’s largest operational contributors to greenhouse gas emissions.

Using sensors, data analytics and machine learning algorithms to manage heating and cooling, autonomous HVAC systems offer the twin benefits of reducing energy usage while delivering better comfort outcomes for occupants.

AMP Capital is the first commercial real estate manager to deploy autonomous HVAC control across its entire portfolio – and the early results are outstanding, showing up to a 17 per cent reduction in base building energy consumption and costs.1

This result comes primarily from the fact that the heating and cooling systems run approximately 40 per cent fewer hours when managed by autonomous systems than they do when conventional automation is in charge.2

Even so, the thermal comfort levels of building occupants – measured by how a room’s temperature meets the desired set point – are 30 per cent better.3

How is the software achieving this? Essentially by studying how a building operates and analysing the external factors impacting it such as weather, wind, sunshine and occupancy.

In fact, AMP Capital’s Smart Building Platform captures over 365,000 sensor data points every 15 minutes, while the HVAC software pre-emptively adjusts temperature and airflow every five minutes.4

And it’s not just environmental performance where software is supporting the property industry. The data collected is also used to predict, detect and request maintenance.

This ‘data-driven’ maintenance is already paying dividends for investors, reducing maintenance cost and promising to extend the life of equipment.

AMP Capital deployed the system earlier this year in 35 major buildings including 33 Alfred St and the Mascot Corporate Connect Centre in Sydney and Bourke Place in Melbourne.5

So far, more than 700 maintenance tasks have been escalated to site teams by the automated systems, which are constantly watching for events as simple as a stuck air conditioning valve that would likely go undetected by traditional building maintenance systems.6

Promising results in early trials of cleaning innovation

Technology is also taking on one of the most human tasks of all – cleaning. Cleaning innovation is at an earlier stage than energy and maintenance management, but it is showing promising results.

At Melbourne’s Collins Place, a network of Internet of Things (IoT) sensors and robots have been deployed to improve end of trip facilities and common area cleaning practices through autonomous vacuuming, sweeping, mopping and disinfecting – and freeing up human cleaners to focus on high touch areas to support the health and safety of our customers and visitors.

The robots even politely interact with visitors, entertaining their human guests while they go about their work. But there’s a serious side to it too. Not only does robotic cleaning free up humans for more important work, but the robots use 80 times less water than a manual cleaner.7

The rapid deployment of technology across real estate is coming with an even better outcome for investors – it’s essentially paying for itself.

Reduced energy usage delivers immediate cost savings for tenants and landlords and vendors of the AI systems are paid only if they deliver on promised outcomes and savings.

Advanced Automation proving successful

At Stud Park shopping centre in Melbourne’s Rowville, automated systems have delivered a 16 per cent reduction in base building energy usage. In Sydney, at 33 Alfred St – one of Australia’s oldest skyscrapers – heating and cooling systems run 15 per cent fewer hours and thermal comfort is up 50 per cent.8

At the Mascot Connect Corporate Centre development that includes office buildings and ground floor retail, HVAC is running 20 per cent less with a 30 per cent increase in comfort.9

Beyond energy costs, automated systems also reduce the costs of maintaining and repairing expensive capital equipment by catching small problems before they become big ones.
It’s early days, but this should help building owners extend the life of some of their equipment.
If a HVAC system is running 20 per cent fewer hours, it can reasonably be expected to operate beyond its former useful lifetime.10

So, what’s next for building tech?

Arguably, we are only at the beginning of a great transformation for the real estate industry that will deliver benefits for investors, landlords, tenants – and the planet.

Already, developers are working on using augmented reality to help people find their way around buildings using their mobile phones. It’s also possible for phones to replace the smart cards we use for building entry.

But soon, facial recognition will allow tenants to breeze through security gates while sensor monitoring networks will watch building usage in real time, proving tenants with data on where people are gathering, why some meeting rooms are more used than others and how shopping centres can get better traffic to the little used corners.

All of this will be run by integrated network operations centres watching and managing multiple buildings, delivering better experiences for tenants and guests – and better outcomes for landlords and investors.

1. AMP Capital Real Estate
2. AMP Capital Real Estate
3. AMP Capital Real Estate
4. AMP Capital Real Estate
5. AMP Capital Real Estate
6. AMP Capital Real Estate
7. https://www.lionsbot.com/technology/
8. AMP Capital Real Estate
9. AMP Capital Real Estate
10. AMP Capital Real Estate

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Daniel Lepore, Head of Asset Technology
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Important notes

While every care has been taken in the preparation of this article, AMP Capital Investors Limited (ABN 59 001 777 591, AFSL 232497) and AMP Capital Funds Management Limited (ABN 15 159 557 721, AFSL 426455)  (AMP Capital) makes no representations or warranties as to the accuracy or completeness of any statement in it including, without limitation, any forecasts. Past performance is not a reliable indicator of future performance. This article has been prepared for the purpose of providing general information, without taking account of any particular investor’s objectives, financial situation or needs. An investor should, before making any investment decisions, consider the appropriateness of the information in this article, and seek professional advice, having regard to the investor’s objectives, financial situation and needs. This article is solely for the use of the party to whom it is provided and must not be provided to any other person or entity without the express written consent of AMP Capital.

 

This article is not intended for distribution or use in any jurisdiction where it would be contrary to applicable laws, regulations or directives and does not constitute a recommendation, offer, solicitation or invitation to invest.

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