Smart finance can help the digital transformation of the built environment at low or no-cost

The digital transformation of buildings has experienced strong growth and sales of smart-building technology is predicted to increase in the region of 30% a year as organisations globally recognise their tangible benefits and seek to make their buildings greener. The sector is under considerable pressure during the current pandemic, but this should make smart buildings that much more attractive to retain tenants and staff. Businesses want to consume less energy: first from a desire to reduce energy usage and create a cleaner environment; second from the corporate motivation to reduce expenditure. Their challenge is the capital cost of converting to smart buildings. In essence, conversion to smart buildings turns a former cost into an enabler of business. Digitally enabled office space can be personalised, so the profile of the person working in a given area — immediately on login — dictates information access, security protocols, climate control preferences, room automation and services access/charging and much more. The building effectively becomes a multi-faceted administrative assistant, automatically managed and controlled through digital transformation. Everyone benefits — owner/landlord, operator, tenant and user. Tangible financial benefits are gained through this transformation. Unwell staff cost UK businesses £77 billion annually in lost productivity, while in the US the annual cost of absenteeism represents around $226 billion. Building management systems can help to control temperature, varying it across different rooms or areas, depending on its use and the desire of its occupants. LED technology offers sophisticated colour and brightness combinations to manage occupant comfort, mood and improve staff concentration and productivity. Buildings can also protect against crimes with increasingly sophisticated security systems. Improved pixelation can mean images are captured quicker, and 360 degree cameras mean that one camera can be used where several were once needed. In Sweden, nearly six out of ten businesses have been directly affected by crime in the last two years. Integrating the latest technology into properties can help minimise this threat. While there are clear benefits from the digital transformation of the built environment, that transformation carries a cost. Smart finance is, however, helping to make conversion happen at low or no-cost. Smart buildings have the potential to save approximately 15% to 25% on energy costs, contributing to a cleaner, greener world. If those savings can be harnessed and used to pay for the initial cost of conversion, then owners and landlords can transform their buildings without major capital outlay. Pioneering landlords and owner-occupiers are increasingly looking to solutions whereby the supplier of a service such as smart-building conversion bundles the conversion into a monthly fee across an agreed-upon contractual period. This is leading to the rise of a concept called “Smart Buildings as a Service“ — sometimes called “servitisation.” Landlords and owner-occupiers are conserving their capital for growth and improvement initiatives and are choosing to let integrated technology-service-finance companies fund the digital transformation of their buildings. There are a variety of modern financing models that allow this to happen, but the most attractive of these involves smart solutions partners that are able to do this at low or zero net cost for the building’s owner — public or private. In conclusion, smart building conversion is attractive to all stakeholders, but perceived costs are proving an obstacle. Smart financing can remove that obstacle. Future energy savings can be harnessed to pay for the enabling conversion. The result is that landlords and building owners can go smarter, cleaner, greener, all without having to find precious capital to make it happen.

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