Article written in collaboration between Tommy Hagenes and Christine Kahrs
The Proptech wave is truly sweeping across Norway. The article authors work together at Proptech Bergen and here they look more closely at companies that have launched new products within real estate technology. How does a property company find the best products? And why should a property company use real estate technology? The authors present a simple approach for how a building owner can use proptech to become sustainable.
Today’s buildings account for 40% of CO2 emissions worldwide. To reach the zero-emissions goal, building owners must increase the sustainability of their buildings. But how can we digitalize existing "brown" buildings quickly and easily, so that they become sustainable and smart? By sustainable, we mean here that CO2 emissions and energy consumption are reduced to the lowest possible level, and that the health, safety and environment for building users is safeguarded.
Many building owners are satisfied with the status quo as long as rental income keeps coming in. Some building owners invest in the building or technical infrastructure if costs can be reduced over time, or income and building value can be increased. The challenge for commercial building owners is that cost reductions accrue to the tenant, while the investment is borne by the owner. Changes to a building are therefore often made in connection with tenant changes or at renewal of the tenancy. The investment is then built into the lease and paid off over the tenancy period. But there is a shift underway; if a building owner needs to refinance a commercial building of a certain size, DNB among others now requires that the building has an updated energy certificate and that the owner carries out annual energy measurements, in line with EU requirements.
Digitalization of commercial buildings is a cost-effective way to become sustainable. But how can we digitalize existing "brown" buildings quickly and easily, so that they become sustainable, costs are reduced and building value increases?
A jungle of new proptech products has been launched in recent years. Kahrs notes that as a building owner, she is constantly contacted by various technology companies. Hagenes’s reason for starting the "Proptech Tested" initiative was precisely to solve this problem. It is impossible for individuals or individual companies to navigate a jungle of new technology.
Hagenes has over several years been testing new products within real estate technology. He has extensive experience in the technical management and operation of commercial buildings and knows where the shoe pinches for a building owner. At the same time, he has seen a growing need for technology companies to be able to showcase their products and how they can work effectively together in a building. In Proptech Bergen’s lab, equipment and functionality are thoroughly tested — technology companies must prove that the "PowerPoint" works in practice.
For both sensors and systems, the supplier’s ability to survive start-up and continue developing the product over time is assessed. However, there are many companies with good technology that are poor at communicating the good functionality and features of their products. This is where Proptech Bergen comes in. "Proptech Tested" is to be an accelerator for new technology — but only once the technology is good enough for our buildings. In this way, the serious suppliers will really gain momentum, while the more immature companies can receive guidance and assistance from Proptech Bergen’s members to become market-ready. We have had great success with this — including Airthings, which has now become a stock market rocket!
Hagenes also points out that companies can win major competitions abroad, but these are often "PowerPoint" competitions that reward pitch skills more than the technology itself!
But even companies with good enough technology are not always strong enough to survive. Kahrs thinks back to July 2020 when Swedish sensor company Yanzi went bankrupt — this was one of the companies we at Proptech Bergen chose not to take forward to client buildings, and for good reason.
Hagenes publishes test results to his followers — property companies with a combined total of 5,000,000 sq m of buildings — who already use the test results to select the best products currently on the market. In addition, Proptech Bergen connects skilled consultants with new technology companies to disrupt the difficult pilot phase for a start-up. Hagenes has done this himself with Airthings and Disruptive Technologies, testing the products over time in Proptech Bergen’s premises before installing them with clients.
Together they have installed sensors and a real-time energy meter in Kahrs’ big-box building. Energy anomalies have been found and addressed. Kahrs can at any time document that the building has a good indoor climate and show how tenants can reduce their energy consumption. The next planned investment is Airtight pressure measurement indoors and outdoors, combined with control of the ventilation system. Finally, all of this will be incorporated into a digital twin in the form of 3D scanning. The building will then be smart, sustainable and fully digitalized at a manageable cost, with a payback period of under 12 months.
In this way, energy consumption is reduced while indoor climate is maintained. Sustainability increases, the building is digitalized and becomes smarter, the cost for the customer is reduced — and not least, the value of the building increases.
Kahrs and Hagenes have based this on a methodology developed by the start-up InfraCity. We use the most up-to-date "Proptech lexicon" in the world, and today InfraCity is solving challenges globally. For urban development, the situation is more complex, so InfraCity uses Proptech Tested as part of the early phase of urban development.
Norway and the Nordic countries are world leaders in Proptech, and we must use the advantages such hubs give us — beyond just testing for the sake of testing. But it is important that a property company is conscious of its digital building strategy — at the very least, ask what open data your own suppliers provide, so that more suppliers facilitate the digitalization of existing buildings. The Norwegian Property Federation is now developing guidelines on who should own which data, and how GDPR limits the collection of personal data.
New Proptech products are launched weekly and it is difficult to keep track of which suppliers and products will be on the market in the years ahead. Proptech Bergen tests and communicates the results of its insight to members and clients.
For the real estate industry to contribute to the green transition, the sustainability of older buildings must be increased. By using viable and appropriate proptech, a building’s energy consumption and CO2 emissions can be reduced, indoor climate improved, technical systems and usage digitalized, operating costs reduced and building value increased.
Feel free to contact us at tommy@energy-control.no and ck@kahrs-eiendom.no
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