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Digital Transformation in Commercial Real Estate – Evolving the Tenant Experience

23 Jan 2024

Digital transformation in the commercial real estate sector is here.

The industry is shifting its view of building occupants.

Commercial tenants are being seen as valued clients and guests, rather than just ‘space renters’. After all, without them, unoccupied commercial real estate can dent the most robust of portfolios.

Now more than ever, commercial real estate owners looking for successful tenancies must factor in the tenant experience.

It’s no wonder the importance of the tenant experience is growing rapidly. Digitalisation is the conduit of change that’s going to enable landlords to deliver on their new responsibility to provide a service, rather than just square footage.


“Space as a service” – the role of digitalisation in enhancing the tenant experience

Thanks to forward-thinking developers and landlords, workplaces are becoming more and more comfortable, welcoming and vibrant. Significant inroads have been made in delivering that home-from-home experience that today’s post-pandemic workforce have grown accustomed to.

It is not just things like roof terraces, planted walls, changing facilities and bicycle storage that are contributing towards the tenant experience. Occupants are also expecting a digital environment as part of the service. According to Radius Data Exchange, they’re prepared to spend more to get it.


Providing a digital building will provide a 4.7% uplift in rent compared to other comparable buildings in London”.
Radius Data Exchange, Powered by Estates Gazette

So, for those seeking lasting success in the industry, technology simply cannot be overlooked. That’s why digital transformation in the commercial real estate sector is such an important shift.


What is digital transformation, and why is it so important for the commercial real estate sector?

Digital transformation is starting to positively reshape the commercial real estate sector in the UK. It’s helping to cultivate a long-needed healthy collaboration between landlords and tenants, where tenants are the ‘client’ or ‘guest’, and landlords are the service or hospitality provider.

But the benefits of digitalisation in commercial real estate don’t end there. It also has the power to streamline operations and curtail overheads. And, vitally, to drive sustainability.

Digital transformation can be described as the integration of digital technology across all areas of a business: operations and real estate included.

But it’s also about creating a culture that embraces change. One that’s unafraid to experiment with new concepts.  And one that’s intent on finding ways to make things better. And it’s that culture that’s going to be pivotal to the success of digitalisation in this industry.


Problem-solving: the new innovations making waves in commercial real estate

According to JPMorgan’s 2023 Business Leaders Outlook: Commercial Real Estate, there’s an air of concern in the industry around inflation, rising interest rates and a possible recession. However there is enough potential in today’s problem-solving proptech to keep plenty of optimism on the boil. In other words, digital transformation could be the key to major change.

In navigating the digital transformation journey, goal-setting is a valuable task. It can help influence which technologies are adopted, and how they are used to best effect.

Landlords may, for example, strive to resolve a specific problem that’s been holding them back from growth. They may also set objectives, such as reducing operational costs for improved profitability, enhancing property management efficiency, or bolstering sustainability.

Then there are the goals that filter down into the tenant experience, such as creating a healthier building. A more efficiently run building. One that’s energy efficient from the ground up, designed to boost tenants’ bottom lines, and support their own sustainability efforts.

Picture these benefits trickling down through the tenant experience, improving things at ground level for workplace users and visitors. There are tangible advantages at all levels.

So what can the industry expect in terms of digitalisation?

What exactly are the technologies that are driving change in commercial real estate?


Smart building technology

Smart building technology brings together the power of IoT (Internet of Things) connected sensors, artificial intelligence and machine learning to control, monitor and optimise an array of building operations. As data is collected and analysed from around the premises, it’s funnelled into a smart dashboard, giving managers the knowledge they need to make informed decisions, often in real time.

That’s not all.

The technology also creates automated processes, replacing time-consuming manual tasks and freeing up countless hours to focus on more constructive assignments.

Landlords can expect an array of benefits, many of which can be directly passed on to tenants…


Advanced sustainability

Smart building tech incorporates powerful energy management tools designed to directly reduce a building’s carbon footprint. The systems auto-adjust lighting, heating and ventilation based on weather conditions, occupancy and other factors.

Other features monitor system and appliance health, transforming maintenance programmes from reactive to proactive, allowing for advance-budgeting and reducing the risk of harmful downtime.


Enhanced occupant comfort and engagement

The focus on workplace wellness has been growing at a significant rate since 2021. It’s now known that healthy spaces, free from everyday frustrations, are conducive to improved motivation, productivity and creativity.

In the smart building, occupants are able to optimise their personal workspace. Heating, ventilation, air conditioning and lighting can all be controlled via an app on users’ personal devices, creating the ultimate environment to get the job done, fostering feelings of being valued in the process.

HVAC automations also work to improve indoor air quality, boosting workplace health, as well as avoiding humidity-induced issues like damp and mould.


Improved building management efficiency

Smart building technology promotes compatibility across an array of building devices and systems, allowing property managers to operate proactively rather than reactively. Courtesy of a holistic, 24/7 view of the building and its systems, it’s possible to take preventative action before minor issues turn into major catastrophes.

HVAC automations kick in again, this time protecting the fabric of the building from damaging damp and mould.


Better security

Occupants feel safer and buildings benefit from a more sophisticated level of protection thanks to smart security systems.

The likes of AI-powered video surveillance, remote monitoring, mobile credentials and role based access control all reduce owner liability, streamline operations and contribute towards improving that all-important tenant experience.


Clearer communication

Smart building technology can strengthen tenant engagement and satisfaction. Communications are way more streamlined, with the landlord/property manager and tenant able to correspond in real time via a smart device app. Convenience reigns supreme, as time-consuming helpline calls are relegated to the history books.

But smart building tech doesn’t just facilitate communication. It also has the power to transform the whole problem-reporting process.

Smart predictive maintenance alerts building managers or landlords to a potential issue. So, instead of receiving a message from a panic-stricken tenant, the tenant receives a message from the landlord saying, “We think you might have an issue there, how can we help?” It’s a refreshing new approach, facilitating more of a concierge-style experience for the tenant.


Digital twin

A digital twin is a virtual version of a physical object, process or system. It uses Internet of Things (IoT) connected sensors to pull in data from the real world and synchronise it in a virtual replica environment. Any change that occurs in the physical world reflects in the virtual world, and vice versa.

Testing what-if scenarios in the world of commercial real estate is hugely advantageous. By creating a replica of a building, it’s possible to conduct all sorts of experiments in a safe environment.

Digital twins allow data, workflows and the effects of human behaviours to be analysed in real time. Realistic insights can be gleaned ahead of making key decisions and allocating resources.


Energy efficiency

Digital twins monitor and control lighting, heating, ventilation and air conditioning (HVAC) systems in real time. All systems can be auto-adjusted based on occupancy and climatic conditions, optimising energy use, and reducing waste.

Building managers get to road test scenarios, such as what might happen to the working environment when it hits 100% occupancy during a heatwave. Would the system be powerful enough to cope with increased demand? What would happen to energy consumption? Foresight like this can help avert frustrating real-life scenarios.


Workspace design

Re-organising a working office to test how productivity and comfort levels might change can present challenges. By utilising a digital twin, you get to test the efficacy of layout changes in a virtual environment, with minimal disruption caused.

The technology delivers a detailed analysis of resource consumption, energy use and fluctuating comfort factors through simulations, all without impacting the working day.


Resource management

Monitoring resources is a time-consuming task. But thanks to the digital twin, the likes of water, energy and office consumables can be managed so much more efficiently. As supplies dwindle, the ordering process is automatically prompted. Orders are only placed when necessary, so over-stocking and unnecessary waste is avoided.

Digital twins also detect anomalies. For example, if water consumption is way above the norm, it may alert the presence of a leak. Or if a machine’s output has dropped, it may need servicing. In other words, this technology helps with monitoring that can potentially avert a major issue.

Equipment lifecycle and asset tracking are also part and parcel of this technology, allowing informed decisions to be made around replacements and upgrades.


Occupancy monitoring

Courtesy of real time occupancy data, managers can optimise desk allocation and reduce the overall office footprint.

A recent survey by leading workplace usage measurement specialist, Density, revealed that office spaces were being left unused for around a third of the working day. That’s a huge and unnecessary waste of energy and resources, all completely avoidable courtesy of the rich insights provided by the digital twin.


Sustainability strategy planning and reporting

Digital twin modelling can help businesses identify which sustainably strategies would work best for them. A variety of options can be evaluated ahead of making any permanent changes.

In-depth data on resource consumption, energy usage and sustainability metrics is also a feature of this tech, making the process of ESG reporting and regulatory compliance a breeze.



Blockchain is a centralised, public digital ledger that records transactions and tracks assets across a commercial network. With this tech, permissioned participants get to access the same information at the same time, improving efficiency, building trust and eliminating conflict.

The technology has impacted the commercial real estate sector in a big way, transforming everything from property sale and purchase transactions, to financing, leasing and management.


Greater transparency and reduced costs

By providing a secure, tamper-proof platform for transactions, blockchain helps reduce fraud and increase trust between all involved parties. The technology can also reduce transactional costs by cutting the need for manual processes.

Blockchain ‘smart contracts’ – self-executing contracts that automatically enforce the terms of an agreement – reduce the need for intermediaries and boost the speed and efficiency of transactions.


More efficient data management

By providing a secure, transparent platform for storing and sharing data, blockchain helps reduce the risk of data breaches, as well as boosting the accuracy of data.


Artificial intelligence – leading the data-driven revolution

In the digitalised smart building, vast swathes of data are generated. For a human to assimilate this data and draw meaningful insights, it would take untold hours. This is where artificial intelligence (AI) has the ability to make a substantial difference.

With the power to filter terabytes of data and connect insights across an array of elements, including building performance, energy usage, occupant experience and sustainability in a matter of minutes, AI can provide clear, actionable recommendations for buildings. Insights that could reap significant benefits, and bring to light new and lucrative opportunities.

As AI evolves and is further embraced by the commercial real estate sector, we see it integrating with other technologies, such as drones and robots, improving feedback and engagement with the building and its occupants through physical tours.

Digital transformation in commercial real estate – stacking up for a much-enhanced landlord-tenant relationship

We now know that commercial landlords are no longer seen simply as space providers. There’s been a seismic shift in role, with today’s landlord having become a concierge-style service provider.

Now it’s the landlord’s job to work side-by-side with tenants to deliver the ultimate end-user experience.

Benefits for tenants translate as benefits for occupants and visitors. Commercial tenants have a whole new agenda when looking for property. Gone are the days of a location-location-location focused search.

Workplaces need to attract and retain exceptional talent. They need to create an immersive, engaging, healthy and comfortable workspace. To deliver on ESG goals. To maximise profitability by driving down overheads. And crucially, to be environmentally sustainable.

It’s quite a wish list for the commercial property seeker. But in the digitally enabled building, fulfilling that list will prove almost effortless.

Going forward, and through our conversations with industry leaders, landlords and commercial tenants, we believe that the future for commercial real estate is a bright one. The industry has in its hands the power to transform livelihoods. To bolster business and personal growth. And crucially, to support environmental sustainability.

These are quite substantial responsibilities. But, with the right digital innovations and mindset, and with supportive direction from industry experts, we believe that there is no reason those responsibilities cannot be met.

Smart Spaces is an Internet of Things (IoT) and artificial intelligence powered platform that transforms a traditional building management system into a smart building management system.

To discover how our technology could help transform your tenant experience, bolster meaningful landlord-tenant relationships, and support digitalisation within your portfolio, please get in touch.

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