The rising value of data within property

Data is a hot topic in all sectors. But, among all of the buzz words and acronyms, we inevitably spend our time focused on what data we have and how it can help us today. This is important, but the focus on what it can do today means that it is often seen only as a cost, not as a valuable asset that needs to be managed. Data is used to support most aspects of the property sector. We buy it for a range of different purposes, whether to support planning permissions, identify customers or monitor investment performance. However, we often look at the data as a cost, rather than delivering value. Value for money As an example, if you apply for planning permission, you need to provide some site and location plans as part of the process. The cost for these might be between £10 to £200. This might at first glance feel quite expensive, but what is the alternative? Unless we remove the planning system altogether, reliable and up to date data about the environment upon which the decision can be made is essential. This can either be bought in, at a cost, or you could send a surveyor out to do a full survey. There are times where this is needed, but not all of the time. A few tens of pounds getting data instantly delivered straight to our computer is surely much better than the cost of having to do your own survey over days or weeks? In my opinion, it is good value for money. Running buildings better So, understanding the value of the data that you buy is essential but, even more importantly, what about the value of the data that you are collecting today? Changes to the temperature, the lease, the number of people or the energy consumption of a building are all being measured. This is all data that can inform how to run a building better and improve service for the people inside. If data analysis allows you to run a building better, meaning lower running costs, higher rents and shorter vacancy periods, how valuable is that data? As the link between the data available on a building and the impact of using it to improve performance becomes clearer, data will be recognised as no longer just being a necessary cost, but having real value. Building data is inextricably linked with the building itself, and so will become a vital part of the overall asset value. The link between building data and the value of it is not well documented, but there is evidence out there that suggests what it might be worth in the future. Impact of data As an example, building information modelling (BIM) has been suggested to save 20% of costs at the construction stage and 5% throughout operation. At the same time, according to the Organisation for Economic Co-operation and Development, data-driven innovation can have a significant impact on employee well-being, as well as productivity growth. Research led by Erik Brynjolfsson, director of the MIT initiative on the digital economy, shows that companies that adopt data-driven decision making can have 5%-6% higher output and productivity. A PIA Property Data report suggests that at the end of 2016, the built environment in the UK was valued at £7tn. Imagine if, in the future, the data that a building collects might make up just 1% of the overall asset value. Whatever the number, data captured by business will become more and more valuable as an asset itself and the data collected by buildings will be no different. While a building’s data will become a fundamental part of its value in the future, this will only be possible if it is captured and managed properly. Planning for that today is essential. Dan Hughes is chief executive of LIQUID Real Estate Innovation and Alpha Property Insight