Episode 30 – Part 3 – What is the future of buildings – commercial and residential? with Dan Drogman, Smart Spaces

The following transcript is autogenerated so may contain errors.

Matt Nally  

In for part three, we’re looking at what’s the future of buildings, both commercial and resi and trends and so on. So I think what we’ll start with first to tie in with part two was as a surveying firm or a surveyor, are you seeing certain firms moving with tech much more effectively and driving benefits from that or you finding generally, it’s an area where some businesses still need to explore

Dan Drogman

I think I think it’s actually probably tilted towards more embracing technology. And not definitely like why back five years ago, it was like a small minority of early adopters. But now I think it is more than 60%, at least, which is fantastic. We’ve seen a lot of really forward thinking open minded surveyors for our COVID, come find us learn about our products, because they had the luxury and the time to do so. But then took that back to their client said, Look, this is where we think we can improve our building, obviously, surveying quite a wide range of different roles within surveying. So the ones we tend to embrace the most of the agents. So showing off a first class user experience access to the app, showing off all the amenity the building has, how sustainable the building is, but then you’ve got the MEP surveyors who are looking at design the engineers that are looking at the efficiencies and so they’re getting the data back out of the buildings, and analysing that. And actually, as a designer, you’ve now got the ability to see whether your design played out how you thought it would, you can look at the historical data and say, right, actually, we’ve projected this but it’s not actually worked largely thought. And so you’re, you’re far more well informed for the future. And then you’ve got sort of the bit that sits outside of what we’re doing so much. But you know, valuations and so on. There’s so many fantastic SAS platforms out there that you can leverage to help with your calculations, and so on. So, yeah, I think you really are not going to survive in the future. Without embracing technology. You don’t have to be necessarily passionate about it, I think those that are passionate about it with Excel. But yeah, I think you can’t ignore it. And I think embracing it, you’ll certainly get a return on investment.

Matt Nally

Just slightly off pace, but the evaluation part you just mentioned, do you find that landlords that have property owners that have invested in smart tech and smart buildings, they those buildings generally have a high valuation at the end of it?

Dan Drogman

Yeah, they do. Because at least Yeah, it’s because of lace, you know, what we’re seeing, you know, it’s the correlation in our data across what level of smart you’ve obtained. So are you smart score platinum, gold and silver certified? And how much that buildings leasing? Don’t just think that it’s our technology? It’s not, it’s because they’ve invested in every part of that building, its platinum, in its finishes, its platinum, in the way it’s been designed it, they’ve just really invested the time to think about it, make the product relevant, market it effectively. And so yeah, those buildings, leasing, they’re getting big, and, you know, find out for you keep talking about flexible leases and stuff. And certainly that has grown enormously, but a lot about big buildings in London, I’ve got 15 year leases, we’ve got one building that just got a 25 year lease, you know, so there’s still some really good clients out there willing to commit to these buildings. And obviously, that goes straight into the valuation. Some more interesting things we’ve seen is we had one building sell, and that it had a smart score rating, a minimum it had to reach, it hadn’t been rated yet. And it’s sold mid rating. We were the technology vendor, and they had to make a commitment to the new purchaser, that it would be leased the gold, or they would pay to get it to a gold, unfortunately, we managed to get it for as a platinum. So the client buying it was tough, the client selling it was chuffed. But I’ve been talking about a lot with my clients recently, and I genuinely think when people do due diligence in the future, they’re not just gonna want to ask for your township leases and the length of their leases, they’re going to look at occupancy data, and they say, Okay, this company might have this building for 25 years, but best are occupying 10%, there’s still a good chance they’re going to want to leave or dispose of this asset. And I think that will start to become a must have you’re not that it’s not Oh, we don’t have that. Sorry, we didn’t invest in smart tech, it will be no, we must have that data. And so I think we’re going to see the the outcomes of smart technology in terms of the datasets that come into investments and valuations.

Matt Nally

Yeah, I think that doesn’t make sense, actually. Because it certainly shows the value of that property in a very different light to just what people are paying in the past. It’s shows the engagement and the willingness to potentially on a longer lease and that type of stuff. So yeah,

Dan Drogman

yeah, a lot of our clients are already using this in their CRM is actively, you know, especially on the flex market where the lease limits are so much shorter. They will look at that data and say, right, we’ve leased this 30 person office. And it’s only ever got eight occupants, and it’s got a break game next year, we should probably go back and start talking to them now because we could probably take that back for them, move them into a 10 person. They’re happy. We’ve then got another 30 person offers to put back into the market, rather than wait until they break and then yes, but two legs have already committed to another location nearby. Having that intelligence and being proactive is really powerful.

Matt Nally

My last question then on the surveying survey, so I took a slightly away from that is if you’re interested in learning more Whether it’s about how smart buildings work, or just sort of AI Geminis, you mentioned about surveyors that potentially use AI and catch up to will win 30 to 50%. more productive than peers. Where’s the best place to start with that? Because I think it can be quite daunting. You can log on to GPT, create an account and ask it a couple of questions. But how do you move from there to? Yeah, to really driving the benefits and be able to start writing proposals through it and, and so on? Is there a good place to start?

Dan Drogman

Yes, certainly, there’s a guy called Anthony slumbers is an expert in this domain. And he runs a really good course for real estate professionals. And you would come out of that course, with knowledge that you could deploy immediately and get the benefits straight away. So seriously recommend that. The other thing I would from the smart perspective is become a wiredscore, or SmartScore accredited professional is a very straightforward, accessible exam that you take. So it’s a training course plus an exam. And it really helps you define smart and understand smart. And so yeah, and it would really, truly, both of those would give you a huge advantage with your peers out there. So that’d be my two key recommendations. And if one of you really seriously interested, we could arrange a tour of one of our buildings. So anyone who’s listening to this, obviously reach out to yourself, Matt can take you around and showcase what buildings like in real life.

Matt Nally

Yeah, that I think they’re really good bits of advice there. Because I think it’s, I’ve seen quite a few things in the past, which is I should definitely learn more about this. But actually, you get excited and you want to go and do it. And that’s what where do I start? Suddenly, it becomes quite daunting. Michael’s

Dan Drogman

so easily measurable things that you’ll get a return on? Yeah, yeah. Well Rounded courses on both sides. Can’t recommend them highly enough.

Matt Nally

Awesome. Awesome. I’ll take about myself, I think. Great. I suppose my next topic, within this is trends, I suppose. So under what’s the future of buildings? What changes? Are you seeing globally? Because you obviously mentioned that you’re deeming properties around the world, not just obviously, UK? Are you saying certain countries engaging with this much more and adapting it much quicker? Or is it sort of similar across the world?

Dan Drogman

It’s really interesting that from an energy perspective, Australia has always been ahead of the UK, obviously, the name is racing come from there. So there’s a lot of technology around optimising the energy consumption, the building has been around for a long time, in Australia, but I think from a user experience perspective, the UK and especially London, and other cities, you know, we’re in Birmingham, Manchester, Bristol, but London is sort of, it’s been the Trailblazer there. And so we find all of these clients we have internationally in the USA, eight across APAC, across mainland Europe. They’re all coming here. They all come here, look at the case studies, how to deploy the technology, and then they deploy it in their own countries. And actually, if they’re quick enough, they tend to be the smartest building in their city, when they take the technology home. They will get commoditize. Over time, unfortunately, we’ll continue to invest in the next generation of smart technology to keep us ahead. That’s

Matt Nally

a good point. You said, obviously, they’re quick enough, they’ll be there’ll be the smartest of what, what’s the length of time from saying I want to go at go ahead and implement smart bone technology and actually putting in place a slightly open question obviously, depends on how long is a piece of string? What How much do you implement? But is there a typical timeframe? Yeah,

Dan Drogman

I think it does come down to what you have in your building. So if you’ve been really lucky, and you’ve had a really good MEP designer that understands smart, and he’s put open interfaces throughout your building, he’s got mobile compatible readers, and mobile compatible access control system, lifts and so on. You could deploy this in a month, plus equity. But you typically find you don’t always get all of those systems, you will have maybe the access controls capable. The lifts are closed protocols. So you need to get an adapter to make an open protocol, the same for the BMS. But certainly in our history of smartspace. It’s been really lucky, we’ve gone to the building, we do an analysis, we provide a report to the client saying, Look, this is what you need to purchase for upgrades. And we’ve gone green, green, green, green, green, you’re ready to go. And so that means you can deploy as quick as like four weeks into the cloud, and then you provide the training and you’ve got people utilising the platform.

Matt Nally

Okay, that’s fascinating. On the, on that note, then in terms of ease of deployment, depending on honestly what’s in place. Do you think all buildings will move this way eventually? So all commercial buildings or residential buildings, or will it will it only suits a certain type of commercial building, for example, so it’s something that will will become mainstream We were

Dan Drogman

Yeah, I think so I think the cost of technology is coming down all the time. So that makes it open to more people, you’re going to have to do it because you’re gonna not be able to operate and Net Zero building without it. See, I really do think it will, I think it will become and I think it’s funny. People don’t really refer to smartphones as smartphones, anybody I said, I used that term today, because I was referring back to 2008. But when we look at today, actually, I don’t ever call that in my household ago, Wi Fi past my smartphone. And so yeah, I think smart will be baked into all buildings, and you won’t even need to think about it.

Matt Nally

It’s interesting how that terminology has changed, actually, because I know my parents still talk about I’ll call you on the mobile. And I’m like, I don’t differentiate between landline and mobile anymore, because that’s actually getting sold windows, which is

Dan Drogman

that’s funnily enough. One of my biggest bugbears at the moment is the amount of cold callers that we have across our phone system in the office, our 24 hour support desk out in New Zealand, our mobile phones, I’ve actually gone through a therapeutic session of registering them all for like x directory, because it’s actually killing us. Like, as the brand gets bigger, we’re getting more notoriety we are getting hounded is it’s a distraction every day, you’re trying to drop this coal. And we you know, we like to think we’re really friendly and polite and smart spaces. Don’t just hang up, you know, but then, you know, we start a call, it’s just distracting us. So yeah, certainly a big bugbear of mine. And much probably the main reason I never went with the landmark.

Matt Nally

Yeah, yeah, I agree with that. That’s, that’s interesting. That’s changed, I think, as well. But guess the rate of tech change generally has been fascinating. I suppose that the I touched on it before it. Is there a risk of a lot of this tech going obsolete at a date? Or is that why people don’t necessarily potentially invest in it? Is that is that the main reason people won’t go ahead? Are there other reasons behind it?

Dan Drogman

Yeah, I think we haven’t seen a lot go obsolete. We’ve been quite fortunate. I think your biggest risk error will be sensors, I think sensors depend on what they do. That’s why potentially. And what we’ve seen there is that, you know, some sensors come into the market to do a Pacific thing. But then someone else has adapted an existing system to do the same thing, which means you’ve got consolidation, you don’t need to enhance that with a sensor. So a case study there would be that people now use like the WebEx cameras to count people in meeting rooms, rather than use a sensor. And so over time, you might say, Well, yeah, I’m not gonna buy a sense anymore, because my WebEx kick does that. So that’s probably where we see that happening. But most overriding the good case in point is that the new wallet technologies for accessing buildings, we can go back quite far with with the existing reader technology, and further than you’d think, BMS is, you know, we can go back 810 years, you know. So yeah, some of the core systems, not so much. But some of the more innovative sensors, certainly there were disruption there. But the benefit, there is the costs coming down all the time. So actually, so actually, what you start to think about that is more the sustainability angle, and how these systems can be recycled. And fortunately, a lot of the providers now have methods for you to return the sensors, and use that you pay a subscription rather than actually just pay for the hardware. So the risk is reducing all the time.

Matt Nally

It’s something I’ve been saying, even with consumer goods should be part of the process, which is when you pay for something rather than it just being that’s the manufacturers end of obligation that actually that they have to take things back. There’s a they care then about the whole lifecycle behind something, whether it’s a an oven, or whatever it might be in a sense, or whatever it is. I think my final question is around the security aspect of it, because there’s, there’s two sides, there’s probably the fear and then there’s the reality. So is there a fear that people have around security, so you hear about things in the home in terms of like Internet of Things, IoT devices getting hacked, and all that type of stuff? Is that a fear on the one hand, and my other part of it was actually going to be I imagined, on the other hand, it makes security better in terms of, it’s easier to revoke access to buildings via the app than it is trying to get hold of someone’s card again, or stop people switching cars, that type of stuff. So is that? Yeah, what’s the perception and the realities around security with these types of things?

Dan Drogman

Yes, very good question. I think the main thing is the design of the underlying systems, you’re going to connect to the app. So I think, where not enough attention has been paid to that in the past, that actually there’s vulnerabilities even before you’ve got anywhere near smart technology. There’s a whole host of vulnerabilities in a building and that could be a flat network where all your systems sit on one network. So you By popper camera off and I connect to my laptop, I can tell the plant offer, I can control the lifts, that, you know, we’ve come across that and buildings, believe it or not. And so we’ve actually been getting the desert network redesigned and a contractor into to adhere to security principles there. But then we’ve also seen that, yeah, plastic cars can be shared and you’re enhancing security. So I think the elements smart delivers is visibility of that. So you’ll see whether you have those vulnerabilities. You can monitor them, you can monitor who has access, but then you can leverage things like multifactor technology, or biometric to further enhance the security. So certainly smart buildings are more secure. But you know, you need to have to, but security is paramount. And so one of our biggest investments in our business in cybersecurity. Yeah,

Matt Nally

I can imagine. I can imagine that. That’s the Paramount part. But it’s interesting, I think. Yeah. Because I can imagine there’d be some people that have the fear of do you add more vulnerabilities in by going down that route? But actually, you forget, that doesn’t mean that there are none to begin with? You already have networks and systems in place that could could are more likely to be insecure as they are? Yeah.

Dan Drogman

Because you’re not monitoring? Yeah, definitely. Every time we connect to a legacy building, we say that, you know, you know, weak passwords and so on. And like going back to your IoT question, yeah, you know, would never put an IoT sensor on to the corporate network, it always sits in a segregated network, we typically use communication protocols that wouldn’t be able to communicate with other technology in your space, and moral ones are really popular technology for that. But yet, a lot of it and most of it goes into the architecture. And then it’s the monitoring there afterwards.

Matt Nally

Yes, that’s really interesting. And yeah, we’ve obviously focused a lot on cybersecurity as well in terms of our business. And it’s the big focus, but I think that often the realities and perceptions can be misaligned. Yeah, horror stories versus actually what goes on and how it can make things more secure. Yeah. Really enjoy today’s episode and going through the three topics. Thank you very much for coming on. If anyone wants to get in touch with you, or smart spaces generally, what’s the best way to get in touch the

Dan Drogman

best way is LinkedIn. So ever present on LinkedIn? And yes, a smart spaces is how you find us on LinkedIn. And then our website is smartspace is dot app where you can find out a lot of detail around our platform.

Matt Nally

Yes, fascinating website, recommend having a look. Perfect. Thanks for coming on. And hopefully we’ll have another chat in a few months time and see how things are progressed.

Dan Drogman

Brilliant. Thank you. Cheers.