Commercial landlords hope that a new wave of apps designed to improve their tenants’ experience will help office buildings to stay relevant after the pandemic
The commercial real-estate industry has been slow to adopt tech designed to help clients get more value from the buildings they use, but that is changing. A flurry of so-called tenant experience apps have emerged in recent years, enabling users to book meeting rooms, order from the on-site café, create online forums, adjust lighting levels and even monitor a building’s air quality.
The aim is to do for office space what apps have already done for banking: make life easier for clients. The tech also offers landlords access to rich data about their real estate, which could aid their efforts to remain relevant once the Covid crisis is truly over.
The 10ha Broadgate office campus in the City of London is one of the latest adopters. Its owner, British Land, is using a white-label system from Australian start-up Equiem to offer enhanced services to its occupiers, which include advertising giant McCann Worldgroup, investment bank Peel Hunt and cinema operator Everyman.
“People are accustomed to engaging digitally in all other areas of their lives, so it’s unconscionable for property not to do it,” says Sally Jones, British Land’s head of strategy, digital and technology. “Our business is about creating beautiful places – and this adds a digital layer on top of that.”
The system is in still in “soft-launch mode”, she says, but it will be fully activated once employees return to Broadgate in larger numbers. British Land plans to implement it at three further campuses around London thereafter.
It may seem like an unusual time to invest in this kind of tech, given the Covid-driven trend towards flexible working, but Jones believes that it will help her company’s buildings become “more enticing” in a competitive market.
“It adds to a set of tools we already use for gathering data on aspects such as energy use and footfall,” Jones says. “Now we’ll be able to gauge things from the tenants’ perspective. We’ll see how much they like our spaces, what retailers they’re engaging with and what events they like and don’t like.”
Excitement about tenant experience apps has fuelled a spate of investments, particularly in the US. Chicago-based Rise Buildings was acquired by real-estate software firm View The Space for $100m (£71m) in March, for instance, while Boston’s HqO raised $60m in series C funding in April.
Perhaps surprisingly, some of the best-known providers have increased their revenues significantly during the pandemic. Equiem, which reported record sales in the first quarter of this year, now serves 500 buildings worldwide, while HqO tripled its sales and doubled its headcount in the year to April.
Bridging the gap
Samuel Warren, HqO’s managing director for the UK and Ireland, believes that tenant experience apps can help to “bridge the gap between the physical office and the digital workplace” once the pandemic is over. They also complement landlords’ strategies to attract and retain tenants by offering a more “consumer-first approach”.
He explains: “The growth of flexible work models means that the workplace and its community have evolved past the four walls of the office building. Landlords need to find ways to create valuable experiences, for both those who are returning to the office and those taking a more hybrid approach.”
Nick Romito, co-founder and CEO of View The Space, believes that the apps can also play a key role in Covid-era health and safety. He says that the return to office life will necessitate “best-in-class technology to better manage tenants’ changing requirements”. Such systems offer functions such as “touchless building entry and insights into building sanitation and when common areas were last cleaned”.
Market research consultancy Futuresource predicts that demand for such apps will continue growing. Fears that the pandemic has put an end to office life have been overplayed, according to its associate director, Chris Mcintyre-Brown.
“Although many firms might go fully virtual in the next five years, companies will still need to meet and collaborate,” he says. “A lot of office space could be repurposed as flexible meeting space. Apps will play an important role in personalising these and making them more attractive to their users.”
The office as a living space
Mcintyre-Brown sees the growth of apps as part of a wider trend towards so-called smart offices, with younger employees in particular expecting more from their workplaces. “For generations Y and Z, it’s this idea of the office as a hotel – the gym on site, beanbags, the ping-pong table,” he explains. “That has been hard to realise from a technology perspective, but that is changing.”
But not all tenant engagement apps are created equal, warns Ronen Journo, senior MD at Hines. His company, one of the world’s largest real-estate developers, uses apps at five of its complexes to support activities ranging from data mining to “promoting the brand”, working with providers such as HqO, Rise and the Office App.
He notes that the app market is becoming crowded, which makes choosing the most suitable tech an increasingly difficult task.
“There is so much energy and activity, but you need to be able to sift through the noise,” Journo says. “Tenant engagement apps are never going to be the ‘iOS’ of a building, so we need to be pragmatic and consider what makes sense and what’s really going to add value for the occupants.”
To be successful, the apps need to act as a “thin veneer”, integrating the tenants’ technologies seamlessly into a coherent and intuitive interface. “This is critical, he says. “That way, we can evaluate what amenities we’re offering and interact more with our clients, ultimately better serving their needs.”