Why Collaboration Is a Necessity When It Comes to Our PropTech Investments

When people think of digital disruption, or indeed of start-ups involved in innovative and groundbreaking technology, the building and real estate industries don’t usually spring to mind. There is, however, huge potential for digitization and innovation within these sectors which have in the past been labelled ‘digital laggards.’

New and emerging technologies such as big data and data analytics, virtual reality, augmented reality and machine learning have the potential to help improve productivity, safety, efficiency, comfort and reduce waste, energy consumption across the entire planning, construction and building management process. With some 80% of construction projects over budget and 20% running over time according to McKinsey research, it’s an industry that’s ripe for technological disruption.

At the Innogy Innovation Hub, we are constantly searching for new ideas and business models that are set to disrupt or replace how the energy system currently works. Buildings consume 40% of the world’s energy output and, according to the International Energy Agency, energy demands in the buildings sector could increase 30% by 2060, which is where buildings and construction fit in. We believe that, through the convergence of technologies from a variety of sectors, buildings will become autonomous; becoming energy customers in their own right. While this may seem far-fetched initially, it’s set to soon become a reality. As cities gradually become ‘smart’, with new technologies creating digital links across infrastructure and transport, buildings will be an essential component, evolving to interact with people, devices and the energy system as a whole. Buildings will also be increasingly thought of as “smart organisms.” They will be able to interact with the energy system to trade energy with each other autonomously. They will automatically order services for maintenance and cleaning based on real time data and pay the service providers automatically via smart contracts. For those using the buildings, they will be able to guide new visitors through with AR guides or personalize each room to the liking of returning occupants.

Obviously we are a long way off from the inevitable future of our buildings. It will take a convergence of technologies and personnel across planning, construction and management. To cross this expansive gap from vision to reality we take an ecosystem approach to accelerating digital disruption to the building and housing sectors. 

But while technology has come a long way and investment in PropTech has soared in recent years, it’s safe to say that at this point we’re just scratching the surface. Bringing about real change will require forging strong partnerships between the technology firms at the forefront of these innovations and the developers and builders who make them a reality. Increasingly, developers and PropTech start-ups are finding ways to collaborate. In September, UK-based Grosvenor Group partnered with global innovation platform Plug and Play in order to source new technologies for its innovation strategy. Meanwhile, more and more small to midsize PropTech companies are merging to boost their offering, and as a result their investment appeal to real estate giants and others, according to a report by real estate/tech law firm Goodwin 

To accelerate the development of smart buildings, we recently teamed up with property developer Skanska to introduce smart technology into its development projects. Under the agreement, Skanska in Central Eastern Europe (CEE) and innogy Innovation Hub will focus on several key areas, such as data analytics from building systems, user comfort and improvements in the construction process.

We are doing this by connecting Skanska directly with PropTech and ConTech companies in the innogy Innovation Hub Portfolio to drive smart technology into the developer’s projects. The development and smart management of the “digital twin” will be a foundational component of the agreement.

The collaboration will begin with projects in Central and Eastern Europe, with the aim of adding more in the future. By the end of this year, for example, we aim to carry out the first implementation projects focusing on Skanska building investments in Poland, Czech Republic, Romania and Hungary.

We are hopeful that this is just one of many examples we will start to see in the market where PropTech startups and developer communities come together to enact real change, with sustainability at the forefront, in how we build our cities.

For example, the concept of the digital twin is nothing new, and provide significant benefits for building owners and operators. While valuable on its own merit, most of the digital twins on the market today still lack the capability of modeling large-scale assets in great level of detail. Therefore, these models cannot be utilised for understanding structural conditions and enabling predictive analytics, and they lack the speed for use in real-time applications.

That’s where a startup in our portfolio like Akselos has helped us understand what the digital future of buildings looks like. Akselos takes the concept of the digital twin a step further by deploying patented algorithms and technology to model and simulate the behavior of infrastructure, allowing for better designs, lifetime extension and optimized operations and maintenance, which include energy cost savings opportunities. The company’s technology is based on an algorithm called Reduced-Basis Finite Element Analysis (RB-FEA), which they claim is 1000 times faster than conventional simulation technology, enabling “unprecedented power” and the ability to allow for real-time, continuous monitoring of large assets.

Another innovation we’ve seen take hold across commercial and residential buildings is the use of smart plugs and outlets that allow the easy control of energy-using assets. Another startup in our portfolio, Keewi, takes this concept a step further, enabling building owners to see energy usage in real time and providing simple suggestions for improvement. While things like AC, heating and light have all been optimised previously, Keewi provides transparency on plug devices, addressing the last frontier of energy management from that perspective.

Ideally, running a digital twin to drive efficiency gains can be continuously improved as more smart features and functions are added to the building. The integration of Internet of Things technologies, like smart plugs and outlets, are an example of this. Implementing a smart digital twin along with complementary monitoring and efficiency-geared technologies can have a profound impact on existing infrastructure, especially as many of our existing city buildings are quite old.

For the property industry, prioritizing these types of technologies from allows them to continuously push the boundaries of what their buildings can do. There are many innovative owners, occupiers and developers. They are the ones that will move the industry forward. Technologists need to do their best to find and partner with forward thinking professionals. There is a demand for change in how buildings run, from both inside and out of real estate. Only by coming together and piloting experimental technology will the built world be able to achieve its next level of sophistication that we all are hoping for.

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