How can data intelligence increase sustainable property returns?

In commercial properties, the comfort, wellbeing, and productivity of people is largely dependent on the Heating, Ventilation and Air-Conditioning (HVAC) systems which control temperature, humidity and air quality. A comfortable office should be a basic need, but can be overlooked because these systems are invisible.

HVAC is also the largest component of energy consumption.

Like hidden factories, they can make up to 70% of the energy demand and the majority of carbon emissions. If this system is not working the way is should then it makes people unhappy and unproductive, and it damages the environment.

There is an industry-wide problem when it comes to HVAC and the Building Management Systems (BMS) which control these complicated systems. In 2016, the UK Government published a report entitled the Building Performance Evaluation Programme: Findings from non-domestic buildings which spent £8m reviewing 50 new commercial properties over 4 years. It found that all of the properties were less efficient that their design specification for compliance with Building Regulations. The average across 50 properties was 3.7 times worse; the best was 2x worse and the worst was 10x.

It is normal that new properties, on completion, are less efficient that is expected and older properties are usually no better, with a small minority of exceptions. The same study also found that the main cause of these inefficiencies was the BMS control of the HVAC, which can also cause comfort problems for the building occupants.

Whilst the HVAC systems and BMS are usually hidden from view in day-to-day operations, they are critical to the health, well-being and productivity of the tenants because they control the internal environment. The BMS can be responsible for temperature, humidity, and air quality as well as lighting, which are all key factors in workplace health and wellbeing.

In addition to the energy costs, the maintenance of HVAC is a significant cost in the operational budget of a property. The JLL OSCAR Reports have shown that maintenance costs can equal energy costs and together make up almost 50% of the service charge budget. If the HVAC and BMS can be optimised, it will not only improve occupant comfort, but it will save energy and maintenance costs.

So what are the options?

As the property industry sees increasing demand for shorter, more flexible leases, then the quality of customer service in properties will become increasingly important. The comfort of a space will become a critical factor in satisfying tenants because no-one wants to work in a space that is too hot/cold, stuffy, and poorly lit, if they have a choice.

WeWork is offering that choice and flexibility at a low cost for office-workers. When these short leases are combined with smart phones and consumer devices, which make it easy for tenants to measure temperature, humidity and air quality, the pressure to deliver a high quality office environment will increase. A property’s value and how it is rated could be reduced if it is subject to increased voids as a result of unsatisfactory comfort levels. Property valuation will need to take into account live data about how an asset is performing.

This summer’s heat wave has shown that very high temperatures could become more common around the world. In Europe, this heat wave has followed very cold spells over the winter. Not all properties have the capacity to cope with these extremes of temperature. By collecting data from the HVAC system and BMS network it is possible to know whether a property can cope, or whether an upgrade to the HVAC equipment and/or building fabric is required to adapt to climate change. The need for capital works will reduce the property value and could increase the costs for tenants. Using Demand Logic data intelligence it is possible to manage this risk.

Maintaining equipment and reducing costs.

Poor operation of the HVAC system can also reduce the economic life-expectancy of equipment in the property and increase the life-cycle cost. It is not uncommon to find equipment running out-of-hours and often 24 hours, 7 day-a-week - which halves the economic life-expectancy. One commercial property insurance company which partners with Demand Logic has also seen that poorly operated and maintained HVAC systems will signal a higher incidence of insurance claims and higher costs of insurance. For them, Demand Logic data intelligence can help them manage this risk and reduce their re-insurance costs.

Energy optimisation in commercial properties has traditionally focused on capital works and/or energy meter analysis to improve operations. This approach, and periodic energy audits, does not provide detailed insight into the day-to-day operation of a property, and can ignore the internal environmental conditions for tenants. The development of Demand Logic Building Systems Analytics software and IoT technology in the last four years has made it possible to deliver operational property management in a new way.

How we can help.

By using Demand Logic Building Systems Analytics to gather a holistic view of the building systems it is possible to optimise property performance in ways which are not possible to see with only energy metering and an M&T system or a small set of IoT sensors. Having both perspectives is valuable. Demand Logic monitors all of the HVAC equipment including all of the connected sensors monitoring the internal environment and energy meters.

Our standard service utilises the BMS network to provide direct access to all of this equipment. Normally this provides 10,000s of data points on property performance, with our largest properties providing over 180,000 data points (inc. approx. 300 meters & sub-meters) and approx. 17 million data values a day. It is possible to supplement this wealth of data from the building with a new wireless IoT sensor network and data is still collected through a single pathway via our Data Acquisition Device (DAD). Only this rich picture of actual operational performance can show where there is good performance, where there are problems and how they can be fixed today. This data intelligence will increase returns and, in time, increase property values.