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Capturing the opportunities

Published:  11 December, 2004

Andy Haynes
The opportunity to propel the intelligent-buildings market to the next level. Andy Haynes.

The capability of achieving intelligent buildings exists — but the industry has to stimulate its uptake. ANDY HAYNES encapsulates the main threads from a recent major conference.

Building automation and management systems are now taken as ‘givens’ in any new public or commercial non-domestic building. There is no debate on the requirement for them to be installed. Yet all too often, individual systems act in isolation, and significant opportunity for greater performance is missed.

Highly cost effective

The key to capturing this opportunity is integration of the systems. Thanks to the increasing power and affordability of information technology, it is now possible to do this in a highly cost-effective way. Combining the different building control systems using information technology allows us to create intelligent buildings.

However, changing conventional practice in building design is never easy. The supply chain is long and complex, aversion to innovation is the norm, and the established focus on capital cost limit understanding of the value of improved lifetime performance. Equally, for many building types, the characteristics of established building stock act as a perceived barrier to change.

Real requirement

Yet through all this, building owners and users have always expressed a real requirement for increased building performance. Manufacturers and suppliers of advanced building controls are geared up and ready with the products to deliver this performance — but all too often the link is not made. Industry experts recently gathered for a 2-day conference explored, debated and discussed how the opportunities presented by intelligent buildings can be captured to improve building performance. Sessions focused on the what, how and why of intelligent systems in buildings and featured over 40 presentations from leading industry figures.*

The first track featured sessions on opportunities for integrating new building-management technologies and better performing information infrastructures into buildings, as well as presentations on value-added technologies such as intelligent façades and smart lifts.

Range of opportunities

The overriding headline was that information technology has given us the opportunity to manage our building systems like never before. Information on system performance is now available pretty much as and when required through a web-browser interface. The increased proliferation of wireless technology and the speed at which data can be accessed means that management need no longer be location dependent; control can, subject to security considerations, be effected whenever and wherever. This opens up a whole new range of opportunities for owners and users of intelligent buildings to exploit.

The second track looked at the intelligent-building process and how it can be used to develop market penetration of intelligent-building systems. What became evident was that if the intelligent-buildings industry does not possess the skill, information and authority to capitalise on the benefits of intelligent buildings, it will never achieve its potential.

An educational process must be in place — running all the way from the building owner, financier and operator, through the professional design disciplines to the contractor, sub-contractors and tradesmen. The building-procurement process is a long supply and decision chain and unless all involved buy in to the concept of intelligent buildings they will strip out innovation and go back to basics as budgets become tight. An holistic view across each decision maker and influencer community is required to ensure that the added value of intelligent buildings is not stripped out during the building procurement process.

Case for investing

The third and final track looked at the case for investing in intelligent buildings. It looked at investment drivers, proving the business case to investors and focusing on how maximum value can be extracted from buildings through their intelligent operation, management and maintenance. The intelligent-buildings industry is uniquely poised to capitalise on the increasingly stringent legal and commercial requirements related to buildings, but it needs to get the right marketing message across to the right set of decision makers.

Chris Lees, CEO of IT solutions provider Calvis, presented the case that only a third of commercial building stock in the UK is owner-occupied, and that only around half of this lends itself to incorporate intelligent-building technology as a value-add solution. This means that intelligent buildings currently only have a maximum potential penetration of 17% of total building stock.

The overwhelming proportion of commercial stock is actually owned by investment houses that have not traditionally seen the benefit of installing intelligent systems in their properties. These financiers see intelligent systems as an outright capital cost that has to be met, one way or the other.

Real estate must compete with stocks and bonds for investors’ money to maximise return, and the major way in which a building generates return for its investors is through rental income. The additional outright capital cost of intelligent systems must be met either by absorbing the cost, thereby reducing the margin that the investor makes on the rent of their property, or by increasing rent to maintain margin. Neither of these strategies is viewed as attractive in a fiercely price competitive environment such as commercial real estate.

Investment judgements

A change in the mind-set of investors is needed, and it is up to the supply-side to provide the right marketing message to them. Manufacturers and consultants must address the key investment judgements that investors must make.

• How can intelligent systems help me understand my tenants’ needs better?

• Do intelligent systems help my tax case?

• Will intelligent systems improve the flexibility of my building and reduce ‘downtime’ during between tenant fit-outs?

Until the supply side can provide answers to these questions, investors and financiers will continue to think of intelligent systems as an unnecessary luxury in their buildings, rather than as the tools for improving assets that they can be.

The intelligent-buildings industry is established and has a firm base, but in some senses it has reached a plateau, as newer, more fashionable building trends such as green buildings have overtaken it in the minds of building designers and architects.

Momentum

Yet there exists significant momentum and opportunity to propel the intelligent-buildings market to the next level. Regulation such as the new EU Energy Performance in Buildings Directive, which begins to come into force in January 2006, will be seen as a threat by many in the building industry, but for the building-controls industry it represents a tremendous opportunity. Products exist that buildings not only to meet but also exceed the regulations. If the industry can get its messaging right, the market is there for the taking.

Andy Haynes is with iandi ltd, Building 9, Bucknalls Lane, Garston, Watford WD25 9XX.
* ib2004 was organised by specialist intelligent buildings consultancy i&i Ltd with BRE, in association with the Institution of Electrical Engineers. It was sponsored by Schneider Electric, AMX, Echelon, Electrical Contractors’ Association, Honeywell Building Solutions, Konnex Association, Satchwell Control Systems and the University of Reading. The event was endorsed by automatedbuildings.com, BIFM, CABA, CIBSE and IBG.



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