Green PropTech is set to become an integral part of the Real Estate Landscape as property owners and managers focus on reducing costs and minimizing the environmental impact of their assets.
The pandemic has taught us to understand the role of physical assets and properties. What kind of space are we living in to work and move through now? It has also had an impact on the importance of real-time data and decision-making at all levels of society, particularly in the built environment and PropTech sector.
This reflects the real estate sector’s current global priorities of bringing technology to the well-being, operational efficiency, and environmental goals of its inhabitants.
Everyone is looking for ways to reduce the environmental impact of the buildings they operate or manage, given that their operations are accountable for a major portion of global emissions.
Many such buildings’ architects and contractors also optimize material use and take advantage of improved construction design. There are numerous new schools of thought, but one is having an impact on the market – PropTech implementation.
Currently, energy efficiency is central to building construction, the implementation of the facility in relation to proptech before, during, and after construction, the use of Heating, Ventilation, and Air-Conditioning (HVAC), and new appliances, and the act of building the structure itself. The Internet of Things, or IoT, lays the groundwork for energy conservation, not only catching on but also propelling it to entirely new heights.
Global Warming Issue
The most significant issue for a large organization is runaway costs, particularly in terms of energy consumption. With larger organizations comes a more extensive use of various types of electronic equipment. According to the United Nations Environment Program, commercial offices consume 30 percent of total energy consumption.
Overall, economies of scale may apply to the purchase of office equipment and amenities; however, the costs of energy usage do not – that cost remains fixed and multiplied per square meter. Managers can thus recognize that the larger the organization, the more difficult monitoring energy usage maybe, as manual processing struggles to keep up with widespread use.
Sustainability in Proptech: Technology and a Greener Workplace
Smart technologies are essential for commercial real estate (CRE) owners and operators who want to reduce their carbon footprints and optimize their property operations. To attract and retain tenants while achieving long-term sustainability goals, many industry leaders are looking to increase the number of PropTech sustainability solutions on the market.
Providing Energy-Effective Properties
Tenants and employees have higher expectations for their workplace than ever before, transforming the office from physical space to social hubs. The office must provide flexibility and connection, but most importantly, it must reflect employee values. Tenant companies need to focus on sustainability to meet the needs of today’s socially conscious workforce.
As a result, tenants will increasingly prefer to lease environmentally friendly properties, adhere to green building standards, and invest in functional amenities. Simultaneously, landlords must report on their sustainability initiatives and share the results with tenants.
IoT Sensors & Space Optimisation
Office and facility managers want a better understanding of how space is distributed within the structure. The reason for this is to make data-driven decisions about how to distribute power, heating, and air conditioning throughout the building. Such comprehension is critical in establishing accountable consumption patterns for both office and retail tenants.
Space optimization also equates to time savings. Employees are more efficient when resources are used properly, saving time needed to operate rooms and facilities and thus lowering associated costs. In effect, reducing operating time equals lowering energy consumption.
Proptech Sustainability Solutions
Property management teams can use smart technology to not only reduce their carbon footprint but also save money. This technology enables a greener workplace in a variety of ways by identifying areas where waste disposal costs can be reduced or building energy output can be reduced.
When properly implemented, these initiatives will not only lead to financial savings but will also greatly help to attract and retain tenants who want to reflect value in their workplace.
Solutions for Energy Conservation
Offices have the potential to be massive electronic and power consumption ecosystems. In any case of equipment used in a large organization, inefficient use of any of these machines snowballs to potentially thousands of hours of monthly usage, unwittingly resulting in significant energy consumption – and the resulting high costs. In total, offices are involved in a slew of critical initiatives. These are solely for the purpose of reducing excessive energy consumption.
Trends that will influence Green PropTech in 2022
Indoor Air Quality
Indoor Air Quality: As COVID-19 restrictions loosen around the world, the focus for businesses everywhere is on getting people back into the office. Tenants are demanding landlords and property owners provide accurate, transparent, and real-time data on indoor air quality in order for them to determine whether it is safe for them to return to work.
As a result, managing air quality metrics as part of your building operations will be a top priority in 2022.
ESG Reporting: In 2021, ESG reporting and investing will see a sharp increase as public attitudes and investor demands shift toward greater concern for environmental and social factors. Again, the pandemic has accelerated this trend, and many companies now consider ESG reporting to be front and center when establishing corporate purposes.
This trend is projected to accelerate in 2022, with half of the global asset owners incorporating ESG data/analytics into their investment strategy by 2025. Furthermore, according to PwC research, institutional investors in Europe expect ESG and non-ESG products to converge, with 77 percent of these institutions discontinuing purchases of the latter beginning next year.
The demand for transparent and accurate ESG data will grow within the PropTech Space as the world shifts toward a more sustainable mindset.
During the pandemic, Data-Driven Intelligence: During the pandemic, data-driven intelligence and machine-learning technologies proved useful for the real estate industry, providing owners, investors, and tenants with a quick but detailed overview of their property and lease portfolios. As businesses were forced to close, landlords and tenants required timely and accurate information about their energy consumption.
In 2022, the use of data analytics is expected to continue and expand, including aiding in sustainability efforts. Data collection and analysis can significantly improve energy efficiency. This data can be used to modify systems to reflect the desired temperature, air quality, and energy usage during office hours, optimizing tenant experience and ensuring energy is not wasted if no one is in the office.
If 2021 is the year for solution deliberation and experimentation, 2022 is the year for businesses to act and implement solutions to manage energy efficiency, automate building operations, and reduce carbon emissions.