Digital Transformation: maximising your empty building for AM planning

Due to the COVID-19 pandemic, many commercial buildings are sitting empty or seeing far lower usage patterns. For asset owners and operators, this may mean significantly reduced operating income and a question mark over future lease payments. Amid the uncertainty, this is an opportunity for Asset Managers to reassess their assets and consider future scenarios.

Many analysts predict that the real estate landscape may be permanently changed in future. McKinsey identifies assets with greater human density as the hardest hit, such as malls and student housing. KPMG observes that remote working may fundamentally change consumer behaviour and the office-space market: "Forced working from home restrictions might lead more players to reduce office space renting in the future, or to move towards renting "smart offices".

With work-from-home trends expected to continue post-lockdown, increased vacancy rates are forecast. The outlook isn’t entirely gloomy, but it is one of big change. McKinsey suggests that the shift to e-commerce may also further boost already high demands for industrial space, and niche asset classes such as self-storage and cloud kitchens. Building codes may be amended for public health, requiring larger amounts of square footage per person and increased HVAC standards.

As an asset manager, how can you determine which of your assets may need to be repurposed, and in what form?

Start with data

Good strategic planning starts with accurate and reliable data. By capturing the right data, Asset Managers can generate more meaningful insights to drive business decisions. If the information about your assets is out of date, and stuck in different silos, now is the time for an overhaul.

With access to buildings much easier at the present time, Asset Managers should begin by collecting relevant and recent data about the properties they oversee. Consider the slowdown as offering a clean slate to digitally transform your workflow and build up a newer and a more accurate picture of your assets. Good asset information enables better decisions to be made, such as determining the optimal asset maintenance or renewal frequency for an asset.

Gathering data can be a labour and cost intensive process. For most assets, regular condition assessments involve a manual process by a maintenance technician. Using mobile devices can help improve the accuracy and timelines of the data you gather and update, rather than the inefficiencies of a paper-based system with manual data entry to a maintenance management system. Longer term, the rise of the Internet of Things (IoT) will enable automated data collection from thousands of data points in real-time.

Read more about what data to collect here https://assetfuture.com/content/2019/4/26/what-data-is-the-right-data

Adjust costs

Although you may not be able to predict utilisation, you will be able to predict costs for maintenance according to your Asset Management Plans. With lower usage, longer-term maintenance and upkeep costs will reduce. Conversely, more stringent hygiene requirements may see a rise in daily operating costs.

With lower budgets, it’s critical to maximise the usage and performance from the facilities, plant and equipment. Accurate measurement of current usage along with projections for future usage will inform the asset management planning process.

Just as many businesses have had to pivot, so have asset managers that will need to "think out of the box" and embrace new and innovative ideas to get future value from their asset portfolio. This may require targeted investment to refurbish and convert premises for different usage.

At the heart of asset management is the concept of balancing cost, risk and performance across a large asset portfolio and is not an easy task for any asset manager; and never more so than in the current uncertain times. Having accurate data makes it easier to set priorities and decide where to maintenance can be deferred in the event of lower asset usage and constrained funding. With the right data, asset managers can make better informed decisions to fundamentally help asset owners balance costs, risks, opportunities and performance.