Big data is the future of investment and asset management
Improving the sustainable performance of real estate may improve the attractiveness of the asset, helps keep service charges lower and reduces operational costs for occupiers. Energy efficiency is a critical factor, which is why we seek to reduce the energy intensity of our real estate equity portfolio by 30 percent by 2030. Big-data analysis techniques are assisting us with this effort by helping us measure energy efficiency across a broad range of properties. We also are able to see relative performance of assets when it comes to water usage and other factors.
The data disruption: Four real estate trends
· Smart buildings: The digital and physical worlds will continue to converge as the Internet of Things (smart, inexpensive sensors) and the rollout of 5G (the next mobile data standard) allow people to interact with and manage the built environment more effectively.
· Optimization and automation: As more data are created at each building, owners can optimize how systems support the health, comfort and productivity of tenants while also enhancing efficiency. This also opens the door to buildings that self-manage, modifying environmental factors without the need for human intervention. Buildings will be able to self-manage and to provide optimal conditions for specific occupants (e.g., automatically adjusting temperatures in spaces when sensors detect that the space is occupied).
· Virtual power plants: As the world moves toward greater electrification of heating and transportation, rising demand may strain the electrical grid and drive peak prices higher. In response, asset owners are likely to leverage on-site renewable energy and battery storage — in essence, virtual power plants — to manage their supply dynamically and potentially generate significant revenue by selling energy back to the grid.
· Smart cities: Cities, local authorities and land registries are fast adopting open data initiatives, which allow third parties to access digitized public data. Data sets such as transit data, air quality, demographic information and more, as well as property-specific information about ownership and leases, are increasingly available.
Read our in-depth analysis.
By applying big data to big investments with an ESG lens, we can see potential advantages for both performance and risk management.
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1 Ocean Tomo LLC, 2018
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