Commercial asset owners must prioritize dealing with technology obsolescence
One of the major concerns for the majority of commercial real estate asset management companies, developers and landlords is the chance they run that properties they manage are no longer relevant for tenants and investors in five or 10 years’ time in the future, according to Thomasin Crowley, global director of Asia Pacific at WiredScore.
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“A increasing number of stakeholders within the real estate business have concerns about providing a superior experience to their tenants, and achieving sustainable goals, managing their properties more efficiently, and demonstrating their future readiness,” Crowley says. She also says that market expectations over the last couple of years are changing to the point that each building must show its capabilities in order to remain relevant.
In the past year, WiredScore has established itself as a real estate certification company within New York and London, along with other important North American and European cities. The WiredScore name is an international digital connectivity rating scheme, and its SmartScore certification aids developers and asset owners identify the smart building, and encourages the best practices in developing them.
“Our goal is to make the buildings of the world more efficient, and we cannot do that without having an extensive footprint within the Asia Pacific (Apac) region that will be the largest region to grow commercial real estate moving forward,” says Crowley.
Building momentum, extending education
The year 2022 was the month that WiredScore opened its very first regional headquarters within Asia Pacific. The company selected Singapore as its home base for operations in the APAC region. “Our goal for the first few years was to increase recognition and presence in important international hubs within Apac that’s why we opened our first office in Singapore and then followed up with an additional office located situated in Hong Kong,” says Crowley.
WiredScore was already able to establish a presence on the Australian market and had a lengthy history of in working closely with Australian partners like Lendlease, CorVal Partners, Credit Suisse, LaSalle Investment Management and Frasers Property Australia.
“Our inaugural year Singapore in Singapore and Hong Kong was all about making education accessible to the market for digital connectivity, gaining momentum with developers and landlords. We followed that by the extension of the education to tenants,” Crowley says. Crowley.
After two years of working on at the ground in regions, WiredScore is registering 143 structures as part of its certification scheme, mostly in Australia, Singapore, Hong Kong and Thailand. Some buildings have also received two certifications — WiredScore in addition to SmartScore -increasing the number of certifications in the region to the number of 167.
“We’ve at present 66.8 million square feet of real estate for commercial use that is registered across four important Asia Pacific markets. In Singapore there are 13 certifications over 11 buildings,” Crowley says. Crowley. She believes that by the end of the year, another four commercial structures within Singapore will be certified with the WiredScore certification, and eight additional certifications will be given.
The rate of take-up for WiredScore’s certification schemes for Singapore exceeded the initial expectations, according to Crowley. “We started with the idea that Singapore would be a SmartScore oriented market, which is why we have our smart building certification and we’ve seen tremendous growth with the WiredScore certificate.”
She also says it’s evident that the dynamics of the marketplace for commercial services in Singapore is unique in comparison to other markets in the region. “This is boiled down to four drivers of growth in the city-state]: branding and leasing, technical value as well as construction for the future, and an increasing demand for intelligent buildings.”
Singapore is also a place that has benefited from an especially strong belief in investor reporting, as and a strong concentration on the environment, social as well as corporate accountability (ESG) that is deeply rooted in the country, she adds. “These are crucial contributors because the majority of corporate tenants as well as landlords are required to disclose their sustainability initiatives and the majority of the market realizes they are not able to meet their ESG targets without this technological element.”
Negative obsolescence
The task of certifying buildings differs from project to project, and is often done at different phases of development for new projects or completed structures, according to Crowley. For instance, an upcoming project that the team is a part in is the renovation of the Singtel Comcentre located at 31 Exeter Road.
The company that operates the telecoms has announced an agreement with Lendlease to transform Comcentre which was built in 1981 as the company’s base, and transform it into a 3 billion investment that incorporates the most recent digital and smart technology. The development will include two 20-storey Grade A office towers as well as 32,280 sq feet of ground floor F&B as well as retail space. Singtel as well as Lendlease have revealed that they will be aiming for various health, technology and sustainability ratings. These include BCA Green Mark Platinum (Zero Energy), Well Platinum and WiredScore along with SmartScore ratings.
“As the team of developers sign off on the concept design and the different space allocations this is the moment for us to jump into the process. We will leverage our partnership model that lets us collaborate alongside local specialists who are familiar with our requirements,” says Crowley.
The most significant challenge that a landlord or developer confronts nowadays is the growing possibility of the demise of assets as well as upcoming developments. “If you are me, the main thing that the entire market is worried about right now is the possibility of obsolescence” Crowley says. Crowley.
She also says that asset managers are extremely concerned about the fact that it’s going to become more difficult for older real estate properties in their portfolios to be able to attain the standards for benchmark accreditations, such as Green Mark Platinum, and this is a big worry for investors as well she states.
“When you’re thinking about upgrade of the smart system it’s all about the current state of your system to create a baselinethat’s the reason our SmartScore certifications will assist the owners of assets to begin the process,” she says.
Crowley states that many older commercial structures in Singapore must establish this foundation in order for owners to comprehend their requirements and their limitations. “You’re likely to be struggling for a while if you’ve not put the foundation infrastructure put in place but there’s plenty you can do with regards to upgrading,” she says.
A fantastic retrofitting example located in Singapore can be seen in Keppel Bay Tower which was awarded SmartScore Gold and a WiredScore Platinum in June of last year. “These are amazing results for an asset that is already in use and retrofit technology,” says Crowley.
Local experts working with you
Analyzing the company’s performance Singapore and the progress the company has achieved in Hong Kong, Thailand and Australia, Crowley says that the enthusiasm of the owners of assets as well as developers is very positive. With an extensive list of commercial projects that are coming up in Thailand and Thailand, a lot of developers are eager to showcase their work in the international market, she adds.
The most notable new development to obtain WiredScore along with SmartScore certificates can be found at One Bangkok from Frasers Property. Five of the Grade-A office towers were among the first in the nation to be awarded WiredScore Platinum.
“Looking to the future, we’ll be using the foundations we’ve established within Singapore, Hong Kong and Thailand to look at ways to expand our reach into Asia’s Southeast Asian market,” Crowley says. Crowley. “A crucial element to sustaining growth is working closely recognized partners across the globe and collaborating by working with experts in the local market.”