Why I’m excited about the future of big building management.

July 24, 2019
David Walsh

As a self-confessed “big building geek”, I admit to sometimes getting emotional about the way buildings are managed. Over the years my emotions have run the gamut - frustration, bewilderment, even depression - but more recently I am feeling the excitement. I’m seeing some positive developments in our industry that are making me genuinely pumped about the future of big building management. Read on and I’ll explain why.

Before I get to what’s exciting, let me start with the emotion that I believe has been present for many stakeholders in our industry for a long time: frustration. Indeed, my frustration with building management was what led me to found CIM Enviro.

In 2013, I was watching a building maintenance technician shine a torch on the wall and into air vents, as he supposedly diagnosed the temperature problem in a large, complex office building.

“You’re right, it is very cold in here,” he said, “but everything looks okay on the building management system, so I’ll just increase the temperature in the room.”

“Has that fixed the problem?” I asked. “No, but you won’t feel so cold,” he said.

“That’s crazy”, I thought to myself. “There is a fault in this building - wasting energy, making the equipment run harder and making the office cold. Now it’s been “fixed” by making the system fight against itself! There must be a better way to do this.”

The frustrations of running large, complex buildings  

Nowhere is building management more challenging than in large, complex facilities such as shopping centres, hospitals, airports and museum complexes. These properties have thousands of stakeholders, often generate enormous daily foot traffic, and play a critical role in the daily life of both residents and visitors. Globally - and let’s face it, they exist in every city in the world - these community buildings are also responsible for pumping out significant CO2 emissions. Communities, government, investors and tenants all care about the performance of these assets, and there are significant consequences when things go wrong.

Many building management frustrations stem from the fact that facility and operations managers rely on a myriad of old and new technologies, as well as vendors and contracted maintenance providers without often understanding any of the technical details themselves. They have had to trust contractor recommendations and actions, without any independent data that justifies decisions or shows the performance of their contractors in rectifying issues.

From a fund manager’s perspective, I have seen an even higher level of grievance. Owners are faced with large capital and non-capital running costs but have no ability to understand the facts around the costs. They are under increasing pressure to raise the value of these assets while reducing outgoings and keeping tenants happy. Governments and communities have growing expectations and regulations around environmental performance are being mandated everywhere. And yet, owners often have almost no visibility, transparency or control over how well their buildings are being run, or the performance of operators and contractors.

A data-driven approach can significantly improve the way buildings perform

Over the past five years, some companies responsible for large, complex buildings - such as Real Estate Investment Trusts (REITs) and commercial and retail owner-operators -  have been shining the light on their existing building data to improve asset performance.

Data has been key in their journey to optimise buildings, but data alone is not enough. Our CIM Enviro building optimisation software is unique in the way it integrates building intelligence, machine learning and mechanical engineering to improve efficiency, productivity and sustainability across property portfolios.

One company leading the way is QIC, a Queensland-based property fund who has embraced our proactive, data-led approach. In a recent article in the Fifth Estate, QIC was recognised for this and shared some of their learnings and early achievements. In partnership with the CEFC (Clean Energy Finance Corporation), QIC is using CIM Enviro’s ACE platform to (1) help them uncover the root cause and cost impact of building problems and (2) efficiently resolve them.

QIC started with one of the more challenging building assets - a shopping centre, which is not easy to run well. According to Michael Fattouh, the fund manager for the QIC Shopping Centre Fund, the fact that ‘shopping centres grow as the community grows’ makes it difficult to lift their performance. In the article, Michael explained that the constant demand for refurbishment means that there may not be an optimal time to justify the expensive capital expenditure that is perceived as necessary to achieve energy and operational efficiency.

The truth is there is so much that can be done without spending money.  Leveraging machine learning which delivers sophisticated “always-on” engineering smarts, and automation which cuts out much of the “back and forth”, identifying, prioritising and rectifying issues is an easy first step. Data gives operational teams the ability to effectively implement lots of small changes that yield big results.

The real-time identification of more than 200 faults, with a fault closure rating of 90 per cent - now that’s exciting!

The article published some details from a year ago, which was QIC’s initial CIM Enviro trial at the Robina Town Centre in Queensland. Even this first step generated compelling outcomes:

  • 15 per cent reduction in energy consumption
  • $18,000 in maintenance savings
  • a reduction in overall energy consumption to the lowest rate in four years despite the addition of 15,000 square metres of gross lettable area, removing the need for investigation costs and unnecessary equipment inspections streamlined and maximised the productivity of contractor maintenance activity through independent oversight
  • the real-time identification of more than 200 faults, with a fault closure rating of 90 per cent
  • identification of a significant tenant issue before it was logged, allowing for early intervention.

Since that time, CIM Enviro has enabled transformative change in the way QIC manage and maintain their assets across 23 sites, by unlocking and leveraging existing data to drive better, more transparent decision making and stakeholder collaboration.

An unforeseen benefit that better data brings to property owners and managers is a more transparent,  collaborative and innovative relationship between operational teams, including between facility managers and contractors. Clever technology takes away many tedious, low-skill activities, and empowers people to innovate using data-led insights that augment their decision-making. A human contractor could spend hours trying to determine the cause of an issue in an asset and still not get it right, wasting not only their own time but also costing building owners time and money. Data analytics, however, can determine the root cause of a problem as soon as or even before it occurs.

Building management is changing - seize the day!

I know some industry stakeholders remain sceptical of the true capabilities of data analytics. For example, some say that the National Australian Built Environment Rating System (NABERS) energy rating disclosure for shopping centres is too tough. I disagree and I know that QIC - who owns and manages many shopping centres - disagrees too. NABERS is a tool to track and measure a building's performance. REITs are all about providing consistent reporting on the performance of their funds, and NABERS is providing a valuable metric to shareholders. It’s worth adding that NABERS has been so successful in Australia that it has now been adopted in both New Zealand (NABERS NZ) and now the UK as the preferred tool for building performance tracking.

Data analytics and AI are now being leveraged across all key steps in the property investment, management and operation lifecycle - from deal sourcing and procurement to portfolio and risk management.  Technology has improved so dramatically that building owners and operators now have the potential to massively simplify and accelerate their end-to-end process of fault detection, diagnosis and problem resolution giving them real visibility and insight into both site and portfolio performance. That is an amazing change in just a few years!

The future of building management is data-driven. It will be increasingly proactive, more collaborative and all stakeholders will have more time and energy to innovate, driving better economic and environmental outcomes for everyone. Now I think we can all agree, that’s exciting!


David Walsh
July 24, 2019