Smart Offices promise to provide occupants and owners a raft of benefits focused on the total building experience to increase productivity, well being and impact the total building operational profitability.
There are 3 major trends being driven by this promise-trilogy that will impact commercial office project outcomes in the next decade. Three of these trends are:
- The proliferation of wireless sensor-constellations
- Flexible workspace hyper-growth
- Essential Space utilisation analytics
Presented herein is a collection of resources that serve to demonstrate the legitimacy of these trends.
There is significant evidence that both coworking spaces are a massive growth segment in Australia over the next 10 years and space utilisation technologies are a critical technology enabler to make the most of these spaces for owners and occupiers.
There is significant evidence that coworking spaces are a massive growth segment in Australia over the next 10 years
Fundamentally, using the lighting infrastructure to enable this proliferation of wireless sensor constellations embedded throughout offices, supports the needs of the flexible workspaces boom, supports data collection for space utilisation and provides contractors and fit-out players ease of installation to meet NCC Section J6 requirements for lighting.
This includes lower costs to execute on lighting control, compared to legacy systems, easier commissioning and simpler maintenance; and interoperability between a range of solutions so that actionable information can inform decisions to improve productivity, well being and profitability.
Sensor constellations, which involves the deployment of wired and wireless sensors with the ability to measure and collate a wide range of environmental variables such as space occupancy, temperature, humidity, TVOC, C02 and even head counting and asset/people tracking.
For example, occupancy data can identify where meeting rooms are consistently overbooked, office space is being underutilised and demonstrates where additional capacity is needed. Additionally, the data collected by these sensor constellations can be used to facilitate better-informed decisions about adding, expanding, and repurposing real estate.
Occupancy data can identify where meeting rooms are consistently overbooked, office space is being underutilised and demonstrates where additional capacity is needed
Also known as sensor arrays, sensor canopies, sensor mesh and sensor grids, when these sensors are embedded in light fixtures and intertwined within the lighting infrastructure, they provide the additional benefit of providing autonomous lighting behaviour and lighting personalisation, a function which ‘till now was delivered via legacy, siloed lighting control subsystems with some basic integration to BMS type services for facility management.
In fact, given the increased value-return of an embedded senor constellation into a lighting infrastructure, one could argue that the lighting transforms from a purely utilitarian piece of hardware, maintained by the facility management, into a critical piece of the smart building foundation.
Beyond the technology itself, the value is linked to the insights of exactly how businesses are using their spaces. According to Ben Munn, Managing Director, Flex Space at JLL, “The more data you have on how employees and tenants are using your space, the more flexible space you want…Smart sensors can help companies understand the flow of staff and plan the use of flexible workspace, in turn optimising workplace design and ultimately, productivity.”
With smart technology that tracks when spaces are in use, landlords are better able to monetize their portfolio
These sensor constellations may also exist outside of the lighting infrastructure as more stand-alone systems, with a singular purpose. Regardless of how the sensors are integrated into the environments, they are an essential piece of the Proptech landscape that produce tangible benefits which outweigh the initial capital investment, especially when deployed at scale across portfolios, not just single tenancies, floors or buildings.
Flexible Workspace Hyper Growth in Australian Cities
The coworking and flexible working space segment is expected to boom in Australia over the next 10 years according to Ivan Fernandez, a Senior Fellow and Industry Director at Frost & Sullivan, at a recent FMA Digital transformation event in Sydney.
More than half of corporate occupiers across Australia and New Zealand plan to reduce their footprint of traditional leased office space in the next two years, as their portfolios shift towards flexible workspace solutions.
In the next two years, however, 58 percent of Australian corporate renters plan to reduce their traditional leased office footprint space, and 55 percent are looking to increase co-working space use, CBRE says.
There are a number of key trends driving this growth like the speed of delivery, flexible terms, the rise of the millennials in the workforce to decision-makers and reduced-cost benefits.
In a recent report, Office Hub revealed that the average six months taken to sign a typical commercial lease was blitzed by flexible workspace leases, where it took 23 days on average for a business to find and sign a deal on space and 14 further days to move in.
Lease terms were also revealed to be driving these trends as conventional commercial office leases needing 3-10 year commitments but 99% of all flexible office space deals are for a term of 24 months or less.
The cost reductions are also significant both from a cost per sq/metre to lease the space as well as taking advantage of a pre-existing fit-out and shared services such as electricity, internet, and cleaning. For a traditional lease in Sydney CBD for a 50 person office for example “you can conservatively allow $200,000+ per year for these items plus up to $1,000,000 for the fit-out.”
Sydney remains the epi-center of coworking and flexible workspace where “Demand for office space in Sydney CBD is so immense that Spring, Castlereagh, Pitt, Kent, George and Clarence Streets together account for a third of the total coworking inquiries Office Hub received in Australia in 2017-18”
Source: CoWorking spaces Australia 2018 http://sbi.sydney.edu.au/wp-content/uploads/2018/11/Coworking-Spaces-Australia-2017.pdf
The CBRE Pacific Corporate Co-working Survey 2018 revealed up to three-quarters of all tenants occupying 30,000 square metres or more across their portfolio intended to cut their traditional leased office footprint, and all planned to increase their use of co-working space.
‘This strong demand from operators has been matched by appetite from multinational corporations to take up desks in centres for larger customised suites. 2018 also saw the first major occupier brief hit the market, for media giant Fairfax, seeking a flex and core type deal arrangement. ”
As of 2017, research house Frost and Sullivan valued the “flexible office solutions” sector at $960m, with serviced offices accounting for 51 percent ($488m) and the go-go co-working sector accounting for 18 percent ($169m).
Co-working space in Australia is going to triple by 2030. “About 12 percent of all commercial office stock in Australia will be used for flexible workspaces by 2030.”
According to JLL’s head of office leasing Australia Tim O’Connor there is an explosion of coworking space in Australia as flexible office space becomes mainstream. “More space was leased to co-working operators in 2018 than in the previous three years combined, new research shows, as the popularity of flexible office space gathers pace in Australia”
Growth looks to continue as the tightness of the commercial market with businesses seeking space, sans long term leases.
According to Colliers International tenant advisory director Rowan Humphreys “Occupiers are demanding flexibility to directly correlate their headcount to real estate costs and move away from long-term, fixed contracts.”
This headcount correlation to occupancy is informing the growth of the space utilisation technology, for which sensor constellations embedded in lighting infrastructure are an elegant solution. Leveraging the lighting infrastructure, potentially reducing initial CAPEX to serve the specific needs of flexible workspace more cost-effectively and which deliver more than just a cost-saver but a moneymaker too.
According to Damien Sheehan, Australian head of IWG, which is Regus’s parent company The amount of growth the flexible workspace industry is expecting is “quite enormous and …it’s somewhere between six and nine times more than where we are today.
Sensor constellations are a winning client solution in these spaces delivering autonomous lighting control behaviour, data collection and analytics requirements coupled with the ability to provide rapid space profile reconfiguration without expert domain knowledge.
Space utilisation, the measurement of how employees use a space, employs the collection of occupancy data over time to inform better decisions about the location, type and amount of space an organisation will need.
Greater scrutiny is being placed on portfolio and cost optimisation along with space utilisation. The need for multiple, superfluous meeting rooms and big boardrooms that may not be used on a regular basis is being questioned
CBRE Head of Office and Occupier Research, Felice Spark
Companies are now realising the impacts of flexible workspace movement and trends for activity based working are anchored in attracting and retaining the best talent and the best tenants. Finding and retaining talent, and maintaining an effective, productive workforce has a lot to do with the workplace design.
In CapitalOne’s Work environment Survey in 2017 for US workers it was found that about 65% believed workplace design was equally or more important than location when considering a new job and 67% of participants of a 2017 UK study stated the reason for leaving their last roles was suboptimal workplace design.
And in this Australian career survey, 66% of employees said a great workplace was their main reason for being happy at work.
Space utilisation is the key to a high touch and high tech workplace according to Matt Werner, who heads the Enterprise Facilities Management business at CBRE Global Workplace Solutions, who at CoRETech stated “Consumerization is here, everyone wants to get everything they want with the touch of button. That means there needs to be more high touch and high tech.”
Lack of transparency in meeting room availability means that 45% of employees cannot access the right space at the right time and is causing employees to waste up to 20 minutes per day physically looking for available meeting space in a recent survey from Knoll, a furniture design firm which also found that 70% of highly satisfied workers are able to choose a variety of spaces.
One of the adjacent benefits of luminaire embedded sensor constellation is space utilisation analysis which according to Navigating the Complex Smart Building Landscape by Locatee and Memori “space optimization was by far, the most widely quoted use case for solution providers, indicating the increased interest in office design and layout as a tool to improve occupant productivity and to maximize real estate utilization”
Meeting rooms are not being used as designed, and it’s costing companies millions.
These datasets when cross-referenced with head-count growth and retention stats helps companies holistically evaluate space utilization data to forecast where they are going to be in 12-24-60 months and make sure space is flexible enough to accommodate that. Sometimes this means banking or subleasing space and with space utilisation data knowing which spaces to bank which will achieve the greatest productivity is now possible.
These types of insights with respects to workplace design and usage are now driving real top-line productivity outcomes. A CoRETech, Mark Golan, Google’s VP of Real Estate and Workplace Services shared ‘If we can move productivity points 2-3%, that’s worth more than our entire real estate spend.’
If we can move productivity points 2-3%, that’s worth more than our entire real estate spend.
When executed well, the installation of the necessary hardware and software can fully fund the project and more according to Microsoft’s Global IoT Program Manager, Zobra Manolopoulos.
“We want to know if the room is the right size, the right type, and if we have the right number of buildings. We used utilization data to reduce space requirements, and we saved enough money to pay for the utilization project and other projects too.”
And LinkedIn has come to understand real bottom-line savings that not operating lighting, HVAC and other amenities for unoccupied and unused spaces with only “25% of employees com(ing) to work on Friday’s, why are we still preparing for the standard 60%-75%? Those savings translate to real value.” says Victor Sanchez, Head of Global Workplace Engineering.
As competition for talent and tenants increases, the workforce’s tastes, demographics and psychographics change, smart offices are transforming into living offices with a focus on well being and productivity as the key differentiators to productivity and retention.
Information from sensors that informs and facilitates workplace design decisions based on real data from space utilisation is just one small part of the essential ‘information stack’ for companies looking to outperform their competition, and it’s available now.
This article originally Published on September 16, 2019, Linkedin