Interview with Søren Kempf Holm, Associate Partner at Robert C. Spies Gewerbe & Investment
A red light to indicate over-capacity at the entrance to the canteen. An app that guides you to an available parking space. Monitoring people’s movement patterns to help employees work together. User data provides so many opportunities to create value for the users of an office building – and thereby also for its owners.
If you have a look at the office market in Denmark, how data-driven would you say it is?
“The market is quite mature now. More and more people in the office market are working with user data. They might not have a great amount of experience with it yet, but there is an awareness of its importance. It boils down to wanting to keep your asset attractive to the people leasing it. If you can do that, fewer people will vacate. And if somebody does vacate, it will be easier to set a higher rent when new people take over.”
So, would you say it makes good business sense to optimise an office building by harnessing user data?
“The maths is simple. There is added value for your tenants if you can demonstrate that there is always a free parking space, say, because there is an app that guides you to vacant spaces in the underground car park. Or that the canteen conditions are always under control, because you can monitor people’s movements in the building. Or that the indoor climate conditions are always like this or that, it makes the lease more attractive. In these COVID-19 times, there might also be a health angle. What if there was a red light outside the canteen, that lights up when the number of people exceeds a certain limit. It would make it safer to visit the canteen. The amount of user data in an office facility is incredible, and it makes it easier for the tenants to adjust their everyday lives.”
Would you say that this type of measure can easily become expensive?
“Taking steps to make your office lease more attractive does not necessarily have to involve expensive measures. It is more about using data in more creative ways.”
You’re referring to the data that is directed straight at the tenants. But, you also work with data aimed more towards the operation of the property itself, do you not?
“User data can help reduce energy consumption in a property, allowing you to strengthen your position when it comes to competitors in the market that may not be quite as energy efficient. It goes without saying that if you can reduce your energy consumption and still rent out your office space, then your lease income will increase and so will the value of your asset. Whereas a competitor, who spends more money on their energy bill won’t have that advantage. It is insanely interesting.”
Søren Kempf Holm is Associate Partner at Robert C. Spies Gewerbe & Investment. He has several years of experience in the development and sale of properties, for instance, as CEO for Topdanmark Ejendomme and for TK Development/Agat Ejendomme.
Are there any organisational gains in a data-based approach to office facilities?
“People used to mainly work in cell offices, but today more people are sitting in open-plan office environments. This change was made based on an assumption that a shared workspace increases knowledge sharing within the organisation. If we can actually monitor how people really move around a building, by using their mobile phones for example, this provides us with a better insight into how people work in practice. Do they use the nearest staircase when entering the building? Do they leave their things at their desk? Do they get a cup of coffee and stay in their seats all day? Or do they actually use all those facilities that were put in place to improve the way they work together overall? In the old days, I had people going around a building to manually record this type of data. But today, you can do it digitally and as a result it is much more precise.”
There is a lot of talk nowadays about sustainability as a whole, but also within the property industry specifically. Is sustainability a driver within office construction?
“I must admit that I have been bit sceptical towards the sustainability measures that were in place within the property business. I haven’t found a tenant yet who would choose an office in a worse location simply because it scores higher on sustainability. But the powerful thing about the sustainability angle is that whether you look at it in terms of sustainability or resource efficiency, it always amounts to the same thing: a number. If there is something that you pay for but you don’t use – whether it be space, water, heat, light, food – it can be quantified as a number. And an investor can relate to that number. That being said, there has been a clear shift towards sustainability as a priority overall. Just five years ago, if I had a conversation about energy optimisation in a property it would only have involved the CFO. Today, however, an HR representative will also join in with the discussion, because sustainability has become such an important part of the narrative of the company.”
It’s one thing to set up several data points in a property to harvest knowledge. It’s quite another to then take that data and transform it into something usable, isn’t it?
“Implementation and anchoring of data understanding is a very important discipline. I have seen companies that have hired the wrong people to look after the operation of their property; they could deliver cheap labour, but they didn’t know how to run the facility properly. What happens is that the maintenance costs then rise. Perhaps not in the first year or the year after that, but within three, four or five years. And then it becomes expensive. Data is good to have. But you have to figure out how to use it properly, and you still need to actually know how to run that facility in the first place.”