Digital solutions have the power to dramatically impact the way we plan, construct and operate buildings. According to recent research by McKinsey & Company, adopting digital solutions throughout every phase of the construction process could increase market productivity by as much as 15 per cent and reduce project costs by up to 45 per cent. At a global level, digitisation of the construction industry could save up to $1.7 trillion within 10 years, reports the World Economic Forum.
When planning and constructing new buildings, there are numerous benefits to be gained from digitisation. These include: Computation and data analytics to optimise design and efficiency. Digitalising the management of resources and construction schedules as well as logistics. Creation of a digital twin and ultimately simulation of built product to carry out design validation to developer/operator.
Customised smart buildings are essentially intelligent buildings equipped with IoT systems that generate extra economic and ecological value for all parties. After all, digitisation mainly means ‘software’. If smart buildings are in danger of becoming outdated, a software update can make them state-of-the-art again – a significant cost-saving benefit for the future.
The complete digital record of the building represents an enormous asset for developers, building operators and owners. It makes processes significantly simpler, and the operation of the building becomes much more efficient as a result. At Drees & Sommer, we believe there will be no alternative to the digitisation of buildings.SUBHEAD:
Technology and the digitisation it enables has changed people’s behaviour dramatically in recent years. Companies like Amazon, Uber and Airbnb lead the way; we now shop online, we book and track our transport via an app, and we choose to stay in other people’s homes when we travel. Our expectations of how we perform ‘ordinary’ tasks have changed, and it’s been a transition we’ve accepted with relative ease.
Digitisation has the power to have a similar level of impact on the real estate business. In a recent Drees & Sommer survey, 91 per cent of respondents said digitisation would have either a strong, or very strong, impact on the real estate sector.
However, the main challenge for the Middle East construction’s industry will be initiating a radical shift in mindset. Processes are set to change forever and in order to move towards digitisation, owners and developers will have to change the way they work. Digitisation needs to start from the inside, processes need to be transformed step-by-step, people need to be trained and there needs to be a shift in thinking towards a more digitised future. This will pave the way for a more productive, cost-efficient, profitable and technologically-driven regional construction industry.
Many digital technologies are already available today, such as reserving electric vehicle charging by smartphone, intelligent parking space management or workplace and room reservations, but they are not yet sufficiently networked with each other. Intelligent networking, in other words a sophisticated interaction of all planning, construction and user data, is one of the major themes of the moment. The pioneers of this trend are in Europe, including The Cube in Berlin, The Ship in Cologne and Hammerbrooklyn in Hamburg, and we are looking forward to the concept emerging in the Middle East in the coming years.
When it comes to incorporating digital solutions during the operational phase of a project, we estimate the extra costs incurred to be about two to three per cent of the total investment if a building owner implements a thorough digitisation strategy before the construction phase begins. Intelligent buildings require little additional upfront capital expenditure and can pay for themselves within the first couple of years due to operational efficiencies and energy savings. This type of investment yields attractive ROI rates that appeal to any building owner.
On the flip side, for those that wait, the incorporation of digital solutions post-construction phase can cost a building owner up to 25 per cent of their initial investment, while projected ROI targets may only be fulfilled within a minimum of 10 years.
Also, consider the potential of extra revenue streams that digitised buildings can provide. The data they generate can tell developers and occupiers what areas are used most, and when, and which spaces are under-utilised and need to be transformed. New revenue streams could come from renting out space during the time it is unused – from meeting rooms to car parking bays – or converting areas into co-working zones, event spaces or leasable units.
Furthermore, there are numerous benefits aside from the potential financial return, with the data from a digitised process adding value at all stages of the planning, construction and operational phases. For example, 3D laser scanning can help with the design and construction of a building as well as gaining survey information about a location. This helps lower the margin for error and is an example of global best practice to achieve reduced project costs and better information management throughout a project’s construction phase.
Digital solutions can help projects stay on time and on budget and be used as an excellent tool to enhance standardised processes. These can then be evaluated and improved by use of artificial intelligence, for example.
The ideal future scenario is that a building will be directly linked to the BIM model used in the initial planning stage, sub-contractors would be organised through the same system and data would be transmitted to manufacturing machines efficiently. Production processes would be completed efficiently and in a timely manner.
From the outset, developers and owners should consider the future users of a building, what they expect and what digital functions they would like the building to have at its disposal. If these details are not considered before the design phase begins, developers and owners will inevitably be tasked with expensive and time-consuming modifications.
Making smart choices
It is not the number of sensors that makes the difference in a smart building, but the value added for the user. Artificial intelligence (AI) used, not as an end in itself, but to create an intelligent building that learns from its users so that it can optimise operations and generate value. We always develop a customised digitisation strategy based on the requirements of the users. Start with a strategic cost/benefit analysis and develop business models which work within that scope upon developing a digital twin using AI platforms.
About Stephan Degenhart
Stephan Degenhart is an associate partner of Drees & Sommer and the managing director of the Middle East office where he oversees a large team of professionals. Stephan has been working with Drees & Sommer since 2000 and has extensive experience in the field of real estate development consulting and project management. Stephan holds a degree in Civil Engineering from the University of Applied Sciences Munich and is currently leading the strategic growth of the Drees & Sommer in the Middle East, fortifying the company’s place in the region