Why Smart Buildings are Good Business: Hausmanns Hus and The Economics of Smart
Written By Heather Wray, PhD | Smart Building Collective
Why build smart buildings? Well, we know that for office buildings, working in a smart building has a good Return on Investment (ROI) with respect to employee health, retention and productivity. Hathon on ROI
But there may also be economic motivations: higher building value, ability to charge higher rent, ability to rent spaces more quickly or simply to have a leg up on the competition. In short, smart buildings make good economic sense.
Let’s explore the thought process behind building one of the smartest office buildings in the world, Hausmanns Hus by Hathon, from an economic perspective.
What is the motivation for building such a smart building?
For Hathon, the motivation wasn’t necessarily to create a very smart building but to create a high quality building, with respect to ease of management of that building and creating an excellent user (tenant) experience. Implementing smart technologies in buildings is often a struggle, and Hathon had the goal of making Hausmanns Hus as easy to manage and operate as possible once the building was completed and to be functional right from the start (i.e., no technical issues to resolve) when a tenant moves in. To give some perspective, Hathon owns their buildings and so they are planning ahead for the operational lifetime of the building. With a 20-year perspective on their investment, it makes economic sense to make sure the building is complete from day one.
Do some smart features make more economic sense than others?
To design and build Hausmanns Hus as one of the smartest buildings in the world with a focus on the highest quality for their end product, an additional cost (quite significant) was initially budgeted in comparison to a typical project. However, upon further analysis as the building nears completion, Hathon is able to deliver Hausmanns Hus at higher quality and top-of-the-line smart infrastructure for the same cost as a typical project! How? Through a unique approach with their suppliers that we call “smart contracting”…stay tuned for more on this in the coming months.
But on a granular level smart features will all have different “payoffs”, whether it be cost savings (e.g., energy management), better user experience and productivity (e.g., air quality management) or building resilience (e.g., flexible smart “grid” systems). What is really needed in the future is more research to measure the true impact (economic, environmental and social) of a smart building. This is something Hathon hopes to achieve with Hausmanns Hus.
How did people working on the project respond to the motivation to create a smart building?
Because Hausmanns Hus was designed to be extremely smart, technical specs for the project were different from those of a standard building (and thus also requiring additional time and expense to prepare). This meant that many service providers were unfamiliar with what Hathon was asking for and saw it as a burden at first. Time (and money) had to be dedicated to helping those building Hausmanns Hus to understand the impact of the smart features on the final building quality. With third-party verification of the “smartness” of the building with the Smart Building Certification, a better view of the impact of the smart features was gained and communicated to all those working on the project.
Although this may seem like an overwhelming and costly endeavour, lessons learned can provide valuable insights for future projects. Also, there is value for the industry as a whole in advancing knowledge and awareness of the power and impact of smart buildings. As smart becomes the norm, there is also value in third party validation like the Smart Building Certification, to separate out what is truly “smart” and what some builders just claim as smart (so-called “smartwashing”).
How do you ensure that building tenants are getting the most out of the smart features and the benefits are not lost in the transfer?
When a tenant signs a contract for a space at Hausmanns Hus, they are also committing to the smart building and the features that entails - this means data about their energy usage and other parameters measured by the smart system are shared with Hathon so they can effectively monitor the building and make adjustments as needed. Tenants may not even be aware of all the smart features available or working behind the scenes - just that their experience is positive and everything is working well for the building occupants.
Hathon has a strategy to be completely transparent with their tenants about the building performance and how the smart technologies are working. By providing tenants with this kind of insight, building users will become conscious about how they use the building and be empowered to make changes to improve their environmental, economic and social outcomes.
Concluding Thoughts
Smart buildings offer value to building occupants and building owners. In addition to economic value, smart buildings also offer environmental and social value, which should not be discounted. Value is also generated in the process of designing and building a smart building like Hausmanns Hus because it raises the level of knowledge about smart features within the industry as a whole. Third-party verification like the Smart Building Certification can be extremely valuable in differentiating what is truly “smart” and communicating that (and associated impacts) to a broader audience.
In the long term, the true impacts of the smart features will truly be understood, quantified and qualified, as the building is managed and operated over its lifetime.
About Hathon
Hathon Holding AS is owned by Jorunn Marie Thon, Olav Engebret Thon and Halgrim Thon. Halgrim worked for 31 years as property manager in the Olav Thon Group, of which 18 years as managing director of the listed company Olav Thon Eiendomsselskap ASA. In 2000, he left Olav Thon to invest in his own portfolio. The group focuses on real estate investments mainly in Norway, Sweden and Denmark. Real estate investments include both long-term real estate holdings and several development projects. In addition, the group has a number of financial investments in shares and securities.
https://www.hathon.no
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