Introduction
The real estate sector has recently been marked by the advent of "PropTech". PropTech (or property technology) has been described as a "new explosive wave of innovation", seeing start-up companies pioneer technological products to address a range of inefficiencies in the property market. For example, Airbnb and BuyMyPlace are among the most prominent PropTech inventions (or "disruptors"), which have transformed the traditional property leasing and purchasing markets.
One of the key issues that has recently been targeted by
the PropTech movement is environmental sustainability
and energy efficiency in businesses. The notion of "smart
buildings" originated from the PropTech uprising. In
essence, smart buildings use tech-platforms to facilitate
the operation and management of buildings in more
efficient ways.
PropTech’s foray into the environmental sustainability field
may have been driven by recent data, which indicate that
40 percent of total energy consumption worldwide is expended
by residential and commercial buildings. In other words,
the building sector is the largest user of end-use energy in
the world.
This article looks at three of the most promising and
transformative technologies that have been developed by
PropTechs to facilitate "green business".
Heating, ventilation and air conditioning systems
A key trend has been the use of advanced software to
improve heating, ventilation and air conditioning (HVAC)
in a building. For example, software can calculate the right
amount of air to condition a space at a particular time
(providing less in the morning, and increasing throughout
the day as outdoor temperature causes a building to heat
up). Automating air handling can have enormous financial
and sustainability benefits for a business, with a study
conducted by Facility Executive magazine finding that by
simply varying factors such as water flow, pump speed
and fan speed in their HVAC system, a 220,000 sq. foot
building can save 364,921 gallons of water each year. Larger
premises can accrue even greater cost and energy savings,
for example, a 500,000 sq. foot data center, with 3,000 tons
of cooling power, can save 778, 518 gallons of water each
year by ensuring best use of HVAC.
A related innovation is carbonTRACK. This is an Australian
device designed to reduce costs, energy use and greenhouse
gas emissions by providing facility managers with live "energy usage insights", and enabling them to remotely
control (or switch off) electrical appliances from a mobile
phone app.
In addition to highlighting areas where energy efficiency
improvements can easily be implemented, carbonTRACK
also enables users to track the results of recent efficiency
upgrades, such as new LED installations in a building,
for example.
Sensor-equipped lighting
One of the latest businesses to invest in "smart building" upgrades is publishing giant, The New York Times, which has
recently installed smart-sensored lighting in its Manhattan
headquarters. The US office was originally designed to
use 1.28 watts of lighting power per sq. foot. However,
after introducing a new lighting management system, the
company achieved a 70 percent saving in energy usage.
Similarly, telecommunications hegemon, AT&T, has recently
piloted a new program designed to lower lighting spending.
AT&T replaced fluorescent lighting in 240 properties with
energy-saving LED lighting integrated with smart sensor
systems that monitor occupancy, light levels, temperature
and energy usage. The initiative has saved AT&T
approximately US$8 million a year in lighting costs.
Smart flooring solutions
In October 2017, Forbes named Pavegen one of the top
five emerging PropTech start-ups to watch in the coming
year. Pavegen produces a commercial smart-flooring
solution in the form of high-tech paving tiles that capture
the weight of a footstep and convert that kinetic energy into
electricity. The renewable energy harvested from footfall
can then be used to power devices or lighting installations.
In November 2013, well-known shopping center chain,
Westfield, installed 30 Pavegen tiles at the entrance to their
flagship Pitt Street Mall in Sydney, as part of an initiative to
create Australia’s first "people-powered" Christmas tree.
Shoppers were invited to "lend a foot" and contribute
towards illuminating two 5.5 m. Christmas trees, decorated
with over 3,000 LED lights, by simply walking over the
energy harnessing floor pads. For every 100,000 footsteps,
195 watt-hours were generated. The spectacular festive
display was within 200 m. of DLA Piper’s Sydney office.
Further, it is pertinent to note that Pavegen’s flooring
innovation is multi-functional, and can offer businesses a
host of advantages in addition to improving environmental
sustainability in their offices. For example, a key feature of
the technology is the in-built "footfall tracking" component.
This allows for the monitoring footfall patterns that can
then be used to discern peak consumer periods and prime
locations visited by customers. The benefits of such data
for the operational or marketing strategies of a business are
clear to see.
Case study: IBM - transforming the management of buildings worldwide
It’s clear from what’s been said above that businesses
across the world are embracing the PropTech movement.
Among these industry leaders is technology guru, IBM.
The company has launched a "Smarter Planet" campaign
which envisions a world where climate change and energy
shortages can be ameliorated through technological
innovation. To achieve this goal, IBM has created the
Watson IOT Platform. Watson is an artificial intelligence
and data analysis software, which is poised to transform the
management of buildings around the world. The technology
enables businesses to examine data uploaded onto the
Watson cloud platform from devices and sensors embedded
in their buildings, with the objective of obtaining the best
service delivery. For example, the data recorded from
sensors in doors, meeting rooms, chairs and tables can help
to better manage room occupancy by informing building
managers that amenities such as lighting or air conditioning
can be switched off in vacant rooms, thereby reducing a
building’s energy usage. Similarly, sensors in chairs and plate
dispensers can even inform kitchen staff how many people
may require meals; thereby preventing food wastage. The
commercial appeal of the Watson Platform is evidenced by
the recent agreement IBM has secured with ISS, a leading
global provider of facility services, to use the Watson
to transform the management of over 25,000 buildings
operated by ISS across the world.
Conclusion
Since 2012, AU$70.4 million has been invested into
PropTech start-ups in Australia and New Zealand
alone, with experts projecting the PropTech movement
will continue to gain momentum in the coming years.
Indeed, Charter Hall, a key client of the Australian
Real Estate team, and landlord of DLA Piper’s Sydney
office, has already strategically invested in this area.
The company has partnered with Collective Campus to
provide a 13‑week accelerator program for PropTech
entrepreneurs. The program is designed to equip
participants with knowledge, tools, support and funding
opportunities to facilitate their establishment, and to
help them flourish in the post-business launch phase.
The benefit to Charter Hall is an exclusive first-glance
into these emerging PropTech start-ups.