The pandemic has transformed many sectors and commercial real estate is no different. A trend towards “hotelification”, which prioritises customer experience over functionality and a fundamental reconsideration of the purpose of buildings has quickened, and there is still uncertainty surrounding the shape the sector will take in the future.
In the short and medium-term, asset owners, conscious of the way the landscape is changing, will be searching for ways not just to guarantee the profitability of their properties, but to diversify their income streams and make them more profitable. This demands an understanding of those properties that have not traditionally been part of the sector’s way of operating.
The Internet of Things (IoT) is one of the principal means by which asset owners can learn more about their properties. Physical devices, such as sensors detecting footfall, motion, temperature, air quality and the wear and tear of critical equipment, to name just a few examples, can sweep up an enormous volume of data and make it available to the building owner or manager in real-time. Using this data, made intelligible by analytics tools and, in some cases, dedicated data specialists, the asset manager or owner can make informed decisions about how the building is used and how the building’s occupants behave.
This is an enormous potential driver of profitability because if those responsible for managing buildings have this kind of intelligence, they can offer a wealth of new services. For instance, a building owner might offer bike rental or storage if a critical number of occupants or tenants travel to the property by bicycle. They might offer a wider range of coffees in a coffee shop if occupants are leaving the building to buy hot drinks. They could also invest in better community managers, tasked with improving the quality and variety of amenities available on an ongoing basis. All these innovations, though relatively small, represent lucrative new revenue streams for the asset owner over time.
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