When people think of digital disruption, or indeed of start-ups involved in innovative and ground-breaking technology, the building and real estate industries don’t immediately spring to mind. There is however huge potential for digitisation and innovation within these sectors. Some 80% of construction projects run over budget, with 20% tending to run over time. Emerging technologies such as big data and data analytics, Virtual Reality (VR), Augmented Reality (AR) and machine learning have the potential to help improve productivity, safety, efficiency, comfort and reduce waste across the entire planning, construction and building management process.
Given buildings consume 40% of the world’s energy output and energy demands in the building sector could increase 30% by 2060, it’s a core area of focus for us and our ‘Smart and Connected’ team. Buildings create 36% of CO2 and we spend on average 90% of our time within them. We believe that buildings will eventually become energy customers in their own right. As cities become ‘smart’, with new technologies creating digital links across infrastructure and transport, buildings will be an essential component, evolving to interact with people, devices and the energy system as a whole.
Creating the digital twin
It all starts off with planning. We believe that creating digital twins of buildings will lie at the heart of the planning process. A digital twin is a dynamic software model of a physical thing or system. One of the key technologies needed to create a digital twin is Building Information Modelling (BIM). Using BIM, it is possible to efficiently plan, design and construct in 3- to 7-D, as well as manage buildings and infrastructure across their lifecycle. We are therefore investing in the enabling technologies that are central to the creation of buildings’ digital twins; including 3D modelling, big data, AR, VR and blockchain.
One of our portfolio companies is Placense. Its state of the art data analytics solution provides businesses with real-time consumer location data and behavioural insights which can prove invaluable when considering where to build the next shopping mall or residential building. Placense is part of the first cohort of our ScaleUpHub, a London-based accelerator programme designed to boost the growth of high potential start-ups in the fields of future energy, urban solutions, customer experience and connected technologies.
We strongly believe that there is significant potential to improve productivity, efficiency and safety in the construction sector through technology. At innogy Innovation Hub, we are investing in the leading technologies behind ‘smart’ construction – namely data analytics, artificial intelligence, the Internet of Things (IoT), AR, VR and blockchain.
One of the start-ups we have invested in is Astralink, which uses AR to provide a Quality Assurance platform for the construction industry, bridging the gap between 3D digital blueprints and real-life construction field work. Their proprietary technology augments 3D digital blueprints onto physical surroundings in real-time, enabling contractors, superintendents, foremen and architects to walk through a project on site and viewing a full-scale BIM model from an iPad. By using a digital twin at construction sites, Astralink helps construction companies avoid construction errors by identifying potential issues before they occur, reducing costs and keeping projects on schedule.
Managing and maintaining
Disruptive technologies therefore help us plan and ultimately construct ‘smart’ buildings which are perfectly tailored to purpose. However, effective building management is key for the longevity of every construction project. Based on our research and conversations with leading experts, we know that the management of buildings relies on: affordability, availability, customer centricity and sustainability.
We therefore look to invest in solutions that can decrease costs, improve the use of recourses and advance human experience. For example, Basking offers real time occupancy analytics, allowing managers to plan leases and spaces accordingly, reducing energy waste and maximising efficient use of the space.
Insights into building usage and condition are invaluable for managers. Our portfolio company SkenarioLabs digitalises property portfolios by collating scattered data and building digital twins. Using AI and machine learning, SkenarioLabs makes conclusions about the technical condition of a building, providing predictive analytics on the building’s performance.
A collaborative approach
As part of our Smart and Connected technologies, we are working closely with our colleagues within innogy SE. Not only do we get valuable feedback and advice for our start-ups, but we have piloted many of the technologies in our own buildings. Externally we actively partner with key stakeholders, including real estate developers, construction companies and facility managers, who share our ‘smart and connected’ vision.
Our highly collaborative approach brings a number of benefits, including common marketing, events and learning sessions. In addition, we are able to provide access to digital innovations by start-ups that have already been quality proven by innogy, which can make the due diligence process easier and reduce risk for corporates.
The automobile industry is focused on automation and efficiency, and we believe real estate should be too. Our Smart and Connected investment thesis is focused on supporting technological solutions to minimise energy wastage in real estate by investing in companies across the three stages, planning, construction and management.
We’re excited about the impact of technology can have on the industry and a future where smart buildings will provide a healthier, happier and more positive experience for their users.
This is a summary of an article our CFO, Jan Lozek, contributed to Immobilienwirtschaft. Check it out here.