Smart Buildings will play an integral role in our return to work and facilitating our evolving new working models. Even though the total office space requirements in the short term are likely to decrease, considerations regarding the built environment such as the quality of real estate will be critical given the role that the physical office space will play in maintaining corporate culture, talent management, collaboration, and creativity. This will inevitably necessitate Smart Building adoption to facilitate the future of work.
There are a number of definitions of what a smart building is, however at a high level it incorporates smart design, engineering and infrastructure; integration of processes; and smart technology to optimally manage the built environment in a more intuitive, sustainable and healthier manner. Additionally, smart buildings are now centred on the human-centric approach that considers how people utilise, engage and experience the environment to create workplaces and spaces of the future, smart communities and healthier buildings.
There are too many layers that can be incorporated to mention, including those relating to technology, but a smart building like any asset can sit on a sliding plug and play scale of requirements and sophistication. They range from designing a new smart building to rejuvenating a dumb building.
It starts from the ground up, from the digital infrastructure, technology systems, devices, all the way to the apps which all need to integrate to enable smarter outcomes, better experiences, and ROI. These outcomes are usually centred around the following impact areas:
- Productivity, and
- Operational optimisation
Even before the onset of the COVID-19 pandemic, according to Fortune Business Insights the global smart building market size stood at USD43.64 billion in 2018 and is projected to reach USD109.48 billion by 2026. As the market has begun to mature and derive an ROI, the property market is being pulled out of its laggard past into a digital transformation making it ready for Industry 5.0.
The current pandemic has created new and accelerated existing forces and trends impacting the property sector, smart buildings, and the future of work. The most significant outcome has been the reversal of power, whereby during the pandemic firms had to pivot to a remote working model in order to keep operating. Now as workers return to work, this tried and tested model has become well established. The typical workplace and space will take on many potential hybrid models that will emanate out of new fluid, flexible and digital ways of working that centres around people. They will be driven by societal demands in aspects such as safety, experience and work-life balance to create new norms. The most critical issue will be how smart buildings, owners & managers and businesses adapt to these changing demands and the role they will play in facilitating the required outcomes.
A recent McKinsey report showed that 74% of people would prefer a hybrid work model with a strong focus on flexibility, demanded by both workers and corporates, not only relating to the work activity but also the space and location. This increased flexibility is expected to lead to a migration to quality over quantity of office space and a transition towards flexible and bespoke leasing models.
This new dynamic and hybrid norm is here to stay. A recent Fortune and Deloitte CEO Survey found that 85% of CEOs agreed that the pandemic has significantly accelerated digital transformation – up from 77% in June 2020. Additionally, 70% of CEOs concur that the pandemic is encouraging collaborations and new partnerships. It also found that in 2021, CEOs still expect 33% of their workforce to be working remotely, and 76% expect the need for a reduction in the traditional office space.
Even in the midst of the economic ramifications from the pandemic and the disruption to people’s lives, the prioritisation of the safe re-entry to the built environment necessitates critical and urgent investment. Building owners need to understand how to entice people back into their buildings and how to create value by highlighting the ways in which they are transitioning their built environments to meet new and dynamic demands. Therefore, some fast thinking real estate companies are utilising the current stagnation to revaluate, upscale and/ or remodel their technology suite through the lens of satisfying increased health and safety as well as functionality requirements of their buildings and its people.
Consequently, this landscape variation rests in the consumerisation of the built environment. As power has shifted away from the company to the end user, this has augmented the working landscape, synergising the physical experience, virtual world of work, and the use of buildings.
Therefore, the future of work will be determined by the intersection of people, new ways of working, smart buildings, and community (a sense of belonging). Pivoting to meet the new demands of a hybrid workplace, while still providing an outstanding, differentiated experience will be the key to success in the post pandemic era. With remote working set to remain, and as hybrid models of working evolves, one part of flexibility will be the requirement to provide third spaces, such as lounges, green areas, outdoor spaces, collaboration areas, and bigger meeting and event facilities.
It is not just an evolution of the traditional relationship between owner, manager and occupier with more flexible leases or design features of third spaces. But rather, also the social contract of providing healthier and safer environments and providing value to occupiers and their people through the experience. This is all underpinned by technology and innovation that supplements the traditional real estate model.
Owners and business managers will need to adhere to the new health and safety requirements which will ultimately require the adoption of technology such as VMS, Thermal Screening, Tenant Apps (for ease of booking and connectivity), Sensors and Integrated Analytics. The latter technology will become imperative to continue our pursuit of more sustainable buildings, whilst adapting to the new 24/7 flexi-work model.
These dynamics go hand in hand with impacting the approach to the whole of life of the built environment. We need to design and construct smart buildings or rejuvenate buildings for the future and consider requirement in each stage of the lifecycle and how it will impact each ecosystem member and each phase to keep up with user and societal demands and the future of work.