Property industry can have a ball with ‘intelligent’ buildings
This article, written by Kathrin McClintock, head of property at Taylor Vinters was featured in Property Week (www.propertyweek.com).
New technology now applies to real estate investment.
Earlier this year, a giant beach ball was placed on the roof of an empty building at Old Street’s “Silicon Roundabout” in east London’s Tech City.
It marks the site of Derwent London’s planned White Collar Factory building, which is expected to save the equivalent of 180 giant beach balls of carbon emissions each year, when completed.
As the scheme demonstrates, technology is not confined to new apps, dot.coms and start-ups, but impacts property investment.
“Intelligent” buildings can now be constructed, in which super-fast internet access, real-time energy monitoring and building support systems come as standard.
Technology is not only changing the properties themselves, but also the nature of the occupier and the locations in which developers build and invest. A business’s workforce is one of its most valuable assets, so firms need to offer employees the best working environment. Virtual location is crucial. The workspace must enable high-speed internet access, virtual communication and amenities — IT systems were once a back-office function but are now crucial to any business.
Investing in areas previously ignored by traditional property investors, such as tech clusters, incubators and science parks, will become part of a balanced investment portfolio.
First, because there is kudos in being associated with the entrepreneurs and ideas being generated in these areas.
Second, because the value of the investment is often underwritten by the government, as with much of the tech space in New York.
Finally, because space in intelligent buildings is flexible and therefore attractive to lots of different types of business in the future.
Changes in the nature of the occupier will affect the income stream and investment value of the property, bringing greater opportunities for structuring rent payments — for example, by moving away from turnover and square footage and basing value on connectivity, injection of funding or growth potential instead.
As cities undergo an architectural flux through which technology evolves and provides sophisticated space for global players, the conventional make-up of an investment portfolio is set for phenomenal change
Kathrin McClintock is head of the property team at Taylor Vinters. For more information please contact, [email protected] or +44 (0)207 382 8060.