Recognising the potential value of data in real estate

The pressure on investors and property managers to consider investing in technology in order to collect and extract value from building data is significant. Issues relating to building performance and end-user experience that were once considered facility management problems are now attracting board level attention because they are having an immediate impact on asset value, occupancy and income.

Data collection, storage and processing platforms are often presented as the answer to these issues because they are able to provide real time insight into everything from how individuals occupy and move around assets through to energy consumption, plant efficiency and air quality. Those insights can then be acted upon in order to reduce costs, limit plant and machinery down time, manage carbon footprint and ultimately deliver buildings that are better performing investments. Although the potential advantages are clear, the industry’s approach to investment in data collection has remained cautious.

A common explanation for this is that lease arrangements often do not include provisions dealing with data issues and occupiers can be sensitive to their introduction. The absence of existing rights, the number of parties involved and the variety of ownership structures can make it challenging to build consensus in support of a project.  The result is that some projects are selected not because they offer the greatest advantages, but because they are least controversial.

Where personal data is being collected and processed, GDPR compliance can also be seen as a potential barrier. Although not unusual, proceeding on the basis that entry to a building is deemed consent to personal data processing is not a safe approach. This is particularly true if refusal could result in detriment to the individual, such as an inability to perform employment obligations or access public services. However, there are other lawful bases for processing personal data that do not require consent such as legitimate interests. Data compliance issues are obviously important from a corporate governance perspective but taking advice early and adopting a fair and transparent approach with occupiers usually means that compliance risks can be effectively managed.

Investors, landlords and property managers who recognise the potential value of building data should be working to understand compliance obligations and ensuring that their occupancy agreements support the introduction of data driven solutions in future, even if the time is not right to implement them today.