Landlords eye smart building technology to attract tenants

As businesses look to utilise new technology to enhance employee welfare, improve their environmental impact and ultimately cut down on utility bills, landlords are upping their investment in smart buildings. According to a new survey, over half of landlords across Europe and North America now see smart controls and sensors as important in building management.

With organisations of all shapes and sizes looking to make efficiency savings while downsizing their carbon footprints, the idea of smart building technology seems to have come of age. Data from the Carbon Trust estimates that the UK’s healthcare sector alone spends more than £400 million per year on energy – something which has seen Navigant forecast that annual spending on energy efficient building technologies in healthcare facilities will hit $6.4 billion by 2027.

Now, a new survey from CIL Management Consultants has found that demand for smart building technology has spiked far beyond the realms of healthcare too. Polling 150 landlords, property managers, agents and suppliers across North America and Europe, CIL’s study found that they increasingly feel smart technology offers new and better ways to control building systems and to engage with occupants.

Respondents revealed that investment in building refurbishments and system upgrades was on the rise, with 84% stating they would increase future spending on the matter. Meanwhile, investment in expensive, advanced heating, ventilation and air conditioning (HVAC) systems – which traditionally take longer to reach a return on investment – is on the rise too. The study found that 73% of respondents now see HVAC and lighting as important in building management. Respondents believe this could improve their growth rate, and boost profit margins by as much as 20%.

Overall, the research shows that 58% of respondents see smart controls and sensors in their buildings as being important to their management, with a huge majority of 92% saying spending in this area is increasing. According to CIL’s research, alongside a large increase in spending on HVAC and lighting technology, landlords clearly perceive great long-term potential for investment in the area. At the same time, more than half of respondents also said facilities management was important for investment; however, fewer than 50% had actually moved to increase investment, suggesting capital being sunk into smart buildings will grow in the future.

In terms of the broader smart building market, CIL is forecasting growth of 5-10% in this area over the next five years, driven in part by the uptake of more advanced systems. This is particularly true of the HVAC market as it shifts towards local heating and cooling of rooms, alongside the development in smart thermostats and room monitoring.

James de La Salle of CIL said of the findings, “Properties in larger cities with higher rents can justify refurbishments and upgrades, so it is these buildings which are seeing the early investment. Older buildings and commercial real estate out of larger cities are likely to take longer to adopt this technology. However, as property managers build a stronger economic case for smart technologies, we predict a sector of high growth and strong margins, with clear benefits for commercial real estate.”