Keep on keepin’ on: Real estate’s data evolution

For James Pellatt, GPE’s director of workplace and innovation, everything and nothing has changed over his decade at the company when it comes to discussing real estate, technology and data. “The sector has changed enormously in terms of what our customers want and how they work,” says Pellatt. “There are companies that didn’t exist 10 years ago and established real estate companies that did exist but don’t any longer. “But I don’t think it’s changed that much in terms of data, sadly. I think real estate is still very behind the curve in terms of managing and using data, and very little has changed in that 10-year period. The opportunities for gathering it are much, much greater. But how you organise it and what you do with it is still very much in its infancy.” On the bright side, a trend in its infancy should have great potential for growth. Pellatt joined EG’s recent webinar to discuss the ways in which the real estate industry can better use tech, data and analytics to help its day-to-day business, the management of its portfolios and its investment strategies at a time when uncertainty is all around. If other industries are further ahead in this space, at least real estate has footsteps – or tyre tracks – to follow in, Pellatt adds. “Real estate is five years behind the motor industry,” he says. “There, you had a mixture of old and new technology, lots of disruption in terms of products changing from a sustainability perspective, the rise of electronic vehicles – all required more and more use of data and less and less engineering. Five years ago, Jaguar Land Rover’s data team was two people, and now it’s over 200 people. “The trick for real estate is to work out which of 10 pieces of information are really valuable, visualise those and then [address] how you store the rest for machine learning…  It’s a lot to do with the organisation and thinking about the art of the possible.” Phoning it in At Nuveen Real Estate, Manreet Randhawa, a fund manager on the Janus Henderson UK PAIF, knows the struggle. “There’s a lot of data out there, but actually using it in an appropriate way and effectively, it’s something that we don’t really have at the moment [as an industry],” she says. “There are so many different companies gathering lots of different data points. Using it in a way that is meaningful to positively affect your investment strategy is quite different, and I don’t think we are there just yet.” Not yet, perhaps, but the work has begun. Most real estate-focused companies would love the luxury of being able to dedicate 200 members of staff to mining the value from data alone. But even without the same level of resource as an automotive giant, firms are finding ways to benefit from new approaches. Randhawa highlights the investor’s use of mobile phone data to help monitor footfall and dwell time in its retail assets, as well as trackers in offices it owns to help it with energy and operational optimisation. “You can build [an asset] to work perfectly, but once you’ve actually got your occupier in, is it doing what it should be doing?” Randhawa says. “What we found is that in some offices, we have lights coming on at 2am and staying on for no reason for another four hours, wasting energy. What we have been able to do is tell our tenants and they have been able to recalibrate their systems. Companies are really struggling with their operational expenses for real estate and energy prices are going up so being able to offer this sort of information is really meaningful to the bottom line for some of the businesses.” Future focus Arik Kogan, vice president of finance and investment solutions at MRI Software, knows that he and his colleagues have to be able to offer real estate what it needs to continue down this path. Once, the focus was on automation, then machine learning. Now it’s artificial intelligence, Kogan says. “We want not only for the system to automate what a human being can do themselves and eliminate human error, but now have this system start thinking for you and making determinations on your behalf,” Kogan says. “We’re not talking the Terminator or anything like that, but when it comes to leases, insurance documents, partnership agreements, abstracting those documents and pointing out the clauses and parameters that you need to care about to effectively run your business. That’s where the focus is today, and it’s an exciting time.” And although industry professionals such as Pellatt and Randhawa acknowledge that the sector has changed only slowly, Kogan sees progress being made. “I’ve seen this accelerate over the past few years,” he says. “The market is less stable and predictable than it once was. Things are changing much more rapidly with the proliferation of technology in our day-to-day lives. But also, the demands of occupiers and tenants and residents [are changing]. There is simply a higher expectation for the adoption of technology and better experiences when it comes to where they live, work and play. So as a vendor, we need to deliver technologies and capabilities even beyond what the market needs right now. We need to predict what they need in the future.” Real estate owners will know that feeling all too well. Movers and shakers James Pellatt is, of course, best known for helping to ensure that GPE is as innovative as possible across its portfolio. But as anyone who follows him on Twitter at @Jamespellatt will know, his musical picks and playlists will keep you on the toes in another sense of the phrase. During EG’s webinar, we put him on the spot by asking him to suggest an anthem for real estate that would help the industry embrace change. He chose the glorious Keep On Keepin’ On by Nolan Porter. But he then did one better – a seven-track, data-themed playlist for EG readers. Just in time for your Christmas party. Here are his picks – you can listen to the full selection on Spotify . Joy Division Digital New Order Everything’s Gone Green Kraftwerk Computer Love Big Data and Joywave Dangerous Daft Punk Digital Love Lo-Fi Digital Fog Nolan Porter Keep On Keepin’ On To send feedback, e-mail tim.burke@eg.co.uk or tweet @_tim_burke or @EGPropertyNews In partnership with