If you are a landlord, your traditional role in the property market will soon change. You will increasingly be expected to build, operate and curate homes and offices that provide a host of smart digital services – from environmental sensing to entry controlled by facial recognition. Why? Because this is what people want
You only have to look to other sectors to see how consumers’ demands are changing. Take banking, for example. Once upon a time, high-street banks competed only with each other for a slice of the market – and all offered broadly similar services. Today, they face competition from digital technology that offers an improved experience. You can send money easily by email using PayPal, and you can even do all your banking from your smartphone with Monzo.
People want their homes and workplaces to function like this too. Why wouldn’t they? We spend 90 per cent of our time inside buildings so it makes sense that we want them to provide us with the best possible experience. Even small things can make a big difference. Why should I go to the hassle of carrying and presenting a security pass to enter a building when technology is available that could simply recognise my face and let me straight in?
For corporate tenants, digital buildings can help them attract and retain the talent they need. Digital also offers a flexible solution where tenants pay just for the time they use workspaces. This explains why large corporates are increasingly turning to growing co-working space providers such as WeWork, which now counts around 22 per cent of the Fortune 500 among its members, including HSBC, General Motors and Microsoft.
The challenge that the likes of WeWork pose to traditional landlords can also be an opportunity for them. Leases for data-enabled buildings attract a premium, and there is potential to sell a range of value-added services.
For instance, landlords could give commercial tenants the option of paying extra to access sensor data via an app that told them exactly how well they were using the space they were paying for – helping them to configure office layouts. Residential tenants might be offered, for a small premium, access to an app through which they can control every aspect of their home.
Much of this is technologically possible now. Tenants and occupants are already asking for it. All that remains is for landlords to provide it – before someone beats them to it.