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“I don't have a single one-liner, 25-words-or-less elevator pitch about what a smart building is. Every building is going to be different.
What value are you trying to get out of it? And then I'll tell you what the smart building looks like.
I can't tell you what it is... Is it to do with tenants and engagement? Is it to do with investment metrics? Sustainability? So there's all of that, but I don't really want to come up with a nice little one line of what a smart building is. I want to say: what's the value for that business?”
—Shen Chiu
Welcome to Nexus, a newsletter and podcast for smart people applying smart building technology—hosted by James Dice. If you’re new to Nexus, you might want to start here.
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Episode 47 is a conversation with Shen Chiu, National Development Director at Investa Property Group, and Co-Founder at International Intelligent Buildings Organisation, a nonprofit that is creating the Intelligent Building Index.
We talked about Investa’s smart buildings program, including how they approach technology on new buildings and existing ones.
Finally, Shen explains the IB Index and the approach behind it, including how it differs from other rating systems out there.
This was super insightful from someone who's living smart buildings every day.
You can find Shen Chiu on LinkedIn.
Enjoy!
Music credit: Dream Big by Audiobinger—licensed under an Attribution-NonCommercial-ShareAlike License.
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
James Dice: [00:00:03] hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.
Episode 47 is a conversation with Shen Chu national development director at Investa property group. And co-founder at international intelligent buildings, organization, and nonprofit that is creating the intelligent building index. We talked about invest in smart buildings program, including how they approach technology on new buildings and existing ones.
Finally, Shan, explain the IB index and the approach behind it, including how it differs from other rating systems out there. This was super insightful from someone who's living smart buildings every day. So please enjoy. Next is podcast episode 47. All right, Shannon. Welcome to the show. Can you introduce yourself for us?
Shen Chiu: [00:01:09] Thanks James. Thanks for inviting me along. Um, so my name's Shane chew on the national development director for a company called investor here in Australia. A investor until recent times was, probably the most recognized, commercial only real estate, uh, business in terms of developing, owning, and then managing commercial real estate.
Um, but a couple of years ago, Oxford properties actually bought 50% of our business and that's the best fighters into other sectors like built-in rental multi-family, uh, as you'd known over in the us. Um, cool.
James Dice: [00:01:43] Cool. And can you take us through your background? Like you said, how long have you been at Investa and what did you before
Shen Chiu: [00:01:50] that.
So, yeah, so I graduated, um, structural engineer, uh, practiced for many years as a structural engineer and, and then slowly moves, out of that into running some residential developments. and then into commercial developments, I joined investor about eight years ago, and, uh, interesting time, cause it was just after the sort of GFC, sort of a hit and we were all coming out of that.
and my background, in developments, uh, since then has really been helping invest, on a national basis, uh, develop a pipeline of projects, primarily commercial office buildings, and in this smart building space, uh, really working on that early formulation of a strategy and a roadmap to how we were going to make our buildings smarter, you know, and why we were trying to make them smarter and what that actually meant in terms of, the technology usages in the line.
James Dice: [00:02:41] Okay. You might be the first structural slash civil engineer you've had on the podcast so far. So
Shen Chiu: [00:02:48] normally we're pretty boring. And we sit in the background with calculators occupants. Yeah,
James Dice: [00:02:54] yeah, absolutely. Uh, and I also, I was stalking you and it sounds like you were, you were, or are a member of a ski patrol team somewhere.
You're it sounds like you're an avid avid skier.
Shen Chiu: [00:03:06] Yes. So, um, So when I came back to Australia, having skied every year from the age of about 18 or 19, uh, into my thirties, I, um, I found that Australia doesn't really have great skiing and it's a long way to travel from Australia to the majority of places, especially with a lot of my friends, uh, overseas in the UK and the, like I worked for the UK for 10 years as a structural engineer.
And you can just catch a Eurostar or you can fly out to the Alps and you can ski, you know, or even head over to the U S but so I'm in Australia and I'm trying to work out what to do. And one of my colleagues, uh, just happened to be on the ski patrol, uh, at our mountains. Uh, and he said, you should come along.
You know, I said, what you'll find is you'll find a good group of people. but they also are all very high-level skiers, snowboarders. And because they have to be at a good level to be able to be competent enough, to be able to rescue somebody in any condition. And he said, so you'll be around good skiers because the majority of Australians are not.
Skills. and, and then B you'll have, you know, an opportunity to just get out there for a couple of weeks, a year and ski and keep your, keep your eye in. And so I joined ski patrol, but, um, you know, my sort of claim to fame, amongst my friends is I've had the biggest ski accident of all of them, even though I'm the guy with all the, uh, the qualifications as escape patrol and first aid rescue and the like, and I've done lots of personal rescues of people, not even the ones that I had to do as a patroller and, and mountain rescue.
I actually have had to look after a number of friends, who've broken things and fractured things, and, you know, making sure that they're comfortable and safe getting down the mountain. I had to do it to myself. Um, and, and it was in the U S and, stupidly, skied into a tree, uh, off peso snowboard and into the tree of peace.
and then, had to, you know, get myself down the mountain, and, uh, safely back started Mendell stuck in hospital for about three months. Um, In the U S uh, with a collapsed lung, recovering. So that wasn't a great thing to happen.
James Dice: [00:05:04] Yeah. How did you get down the mountain with a collapsed lung?
How
Shen Chiu: [00:05:08] did that happen? So, uh, when, when you do, any sort of advanced first aid, you, you learn all things around shock and you learn all these things around the adrenaline. And, uh, you know, so it was sort of, first thing you do is, um, you know, having a known that I've seriously impaled myself.
I did a whole bunch of scans on myself to check my head and I wasn't concussed. I wasn't bleeding. Uh, you know, I hadn't heard my head and stuff coming out, my ears, all that stuff. Um, but I was in extreme pain and I started to shiver and sweat, and I realized that I was going into shock. but I was in a location that was really hard for someone to either find me or rescue me.
So I did what you have to do, which is I sucked it up. and, uh, crawled out of the hole. I was in, got back up in a lot of pain. I say, I, I, uh, I've never been in so much pain and I just limped my way down the mountain on the board, in many ways better than I was on the board. Cause both of my feet were strapped in and I just held one edge and pretty much leafed all the way down the mountain.
you know, it was not the prettiest. Um, I got there. So anyway, but you know, it's an interesting story though. The ski thing, because that time off from work, three months, pretty much in a hospital bed or, in a hotel room gave me a lot of thinking time, a lot of time to reflect on things that were important, things that I wanted to understand more.
It's like, you know, it's like going on a course for three months. I just started reading up and studying, um, things that I was interested in. That actually became even more valuable. I didn't realize when I came back to work, uh, because I was, I had to align some of my technology learnings thinking through that period and consolidating of those ideas into ways I can actually implement that in, in my job, you know, in the development space.
James Dice: [00:06:51] Cool. Really cool.
Shen Chiu: [00:06:53] Really cool. Really scary.
James Dice: [00:06:55] Really cool. The way you turned it around. Yeah. I have two stories real quick to, add onto that. So my claim to fame from an injury standpoint, when snowboarding is that I, the second dam or snowboarded, the first day I took a full day lesson. So that was great.
I was riding blues, the, you know, the first day I was ever on a board, the second day I showed up and hit a patch vice on the first run, got off the lift. First time without a ski instructor got off the lift. Turn didn't fall off the lift, which I was super happy about. Hit a patch of ice at the top of the run.
Not even, not, not even going on the run yet and broke my wrist.
Shen Chiu: [00:07:37] There were more people who break their wrist, snowboarding going through the car park and then bouncing snowboarders or risks and scares a thumbs and ACL.
James Dice: [00:07:50] Yup. Yup. And so now I have two risks cards, that I wear religiously. And if I forget them, I won't go. Um, but, yeah, I'm actually gonna, I'm actually snowboarding tomorrow.
We've got a couple of weeks left. Oh, well, yeah. and the other, the other story I was going to say was I have this like really strong belief that not enough people take sabbaticals. Um, and you had a forced out a little bit of a forced sabbatical, but I mean, that was the impetus for nexus. I had a really tough, job job, and I quit that job, you know, sold my shares in the company I was in.
And I just decided to take six weeks off and nexus came not, not long after that. And so I do, I do feel like, you know, seven, eight, nine, 10 years into your career and more like we need this time off. And it's just super helpful to even just like, get more general knowledge, take courses, do things like that.
Yeah. Anyway. Yeah. people that are listening. Uh, I suggest if you're thinking about it, just go do it
Shen Chiu: [00:08:48] anyway. Would agree. After every 10 years, seven years you do need to be fair. You need a reason to be passionate about what you're doing next.
Say that seven years to do one project. You know, that's what it takes for development. It can take up to seven years to do one project. You need some reason to refresh, to relearn, to be skill, you know, to understand what's new because you've been so busy, entrenched in what you're doing. So, yeah, I agree
James Dice: [00:09:11] with the complainant.
Absolutely. Well, let's dive into it. So I want to start with my favorite question, which is why is technology adoption and buildings so far behind and in your opinion, and we've had a lot of great answers, but I love the fact that we get something different pretty much every time. So I'm excited about your perspective.
Shen Chiu: [00:09:28] Um, yeah, look, I, think, um, historically, you know, bricks also has always been a very slow moving sort of industry construction. At least it's a slow moving industry. Um, and, and it's probably well recognized in the construction industry is probably one of the slowest. It's it, there's a lot of people involved, a lot of unions involved, and changing things, especially with automation and technology usually implies, um, reducing people to produce, you know, efficiencies and automation.
and so there's a direct correlation to, you know, people's jobs where it's not, they're not incentivized in many ways to do that. It also comes back to the learnings. As technology gets more complicated, as things get more complicated and specialized, you need more training to understand those. So then your, normal person who's been doing it for 20 years, 15 years. It's very difficult for them to skill up. It's easy to say. I want to ask to skill up, but it's sometimes you haven't necessarily come from a background where scaling up is on the radar. What do you do? How do you rescale? How do you find a new job?
Um, so you're not incentivized to use those tools. Your everyone's a creature of habit and you just want to do what you normally do. Uh, in construction property is, quite a slow moving beast historically. and then you've also got people whose business streams are fully invested in a way of doing things.
They're not, uh, they don't want to butcher. You know, take away from their current income stream, even if they believe that the new idea will give them, future earnings. So they don't want to disrupt them schools, they will slowly transition across. Um, and so it it's, no different than hydrogen batteries versus diesel fuel.
Uh, the big players are not incentivized to stop selling diesel until they are. Have a big enough monopoly to equal their monetary stream for hydrogen, unless governments legislate something. Uh, it's, it's a very slow, um, move. So, you know, not a great allistic answer there, but I'd say that there's, I guess too many pieces in the puzzle, it's a very complex space.
Uh, there Polly isn't enough advocates at a decision-making level where, because it's complex, why would a investment director, a development director or an investor want to understand the myriad of esoteric, paces when they just want some simple reasons? Uh, and in many ways, governments, I think is the driver for a lot of the changes because government sets legislative policy and then others will have to follow versus will choose to follow.
So market leaders will always follow, will always do their own thing. And they'll make some wins, but usually it will takes a larger body and that's usually government, or it takes a lot social body to actually push that move as has been done with sustainability and climate change. That is a social mood.
Um, but technology people aren't really seeing the rationale yet. So.
James Dice: [00:12:14] Cool. And I think as we explore Investa, a couple of those themes will pop up for sure. In a minute. Uh, so, so can you explain what is Investa again and, and maybe talk a little bit about your portfolio that you're involved in, in Australia.
Shen Chiu: [00:12:30] So, um, investors original or main mandate for, for, from its formulation was commercial office buildings and owning and managing those buildings as well as developing new buildings to put into the asset pool around. $13 billion with office buildings is our main pool. And if I just talk about that rather than talking about the recent change, where we started looking into build to rent, then I can focus more in, on, um, you know, where our new pipeline develop buildings coming from.
Um, and it's, it's looking at, you know, brownfield sites, um, there's rarely Greenfield sites that we're looking at Greenfield being a brand new site in the suburbs. We're looking generally core CBD areas for high rise office buildings. That's our kind of main focus, of the portfolio. Um, and that allows us, I guess, in those sort of buildings to look at higher end tenants, professional services, tenants lawyers, uh, bankers, et cetera.
and then what are their drivers? What are their needs? So that our office buildings can service that to either attract new tenants, um, and were willing to pay the light, uh, rent to make it a feasible building or retain tenants who are staying in there and looking at potentially moving to another building, but say, well, actually I can't get what you guys are offering us.
Um, so that's kind of the, basis, I guess, a little, the hypothesis of our office building offer to be the best, um, office building provider, in the market. Okay.
James Dice: [00:13:56] And how many buildings do you have? Uh, under management?
Shen Chiu: [00:14:00] Yeah. So it's just Australia years ago. Uh, an ex CEO decided that it wasn't worth us owning buildings overseas because we really didn't understand the market or, you know, the, the, the clientele.
Um, so we sent centralized to Australia in sort of the mid two thousands. Um, and we've got probably about 40 buildings in the portfolio now. Um, I should know the number of square meters, but it keeps changing with new development pipeline. We've got, you know, 3 billion of development pipeline coming out of the ground at the moment.
Uh, which means that the number just keeps on changing.
James Dice: [00:14:33] Cool. Well, I want to talk to you about so you're building your buildings. You have existing buildings as well. So I want to to totally nerd out about your philosophy on new and existing, but let's start with like the overall program.
The, like, what are you guys trying to accomplish from a smart building technology standpoint? And what's the strategy that you've put in place to kind of guide how those new and existing buildings end up happening?
Shen Chiu: [00:15:00] Yeah. So, um, Polly, I'll rewind that a little bit to, when I joined invest about eight years ago, there wasn't really a smart building program.
eight years ago when I joined the business, uh, smart buildings, wasn't even a term that anyone was really using, probably eight years ago. in that time, as we were evolving our strategy to just deliver quality buildings, that tenants would want to use that long-term, our investors would always get a solid return from.
Um, and let's say that buildings last. Around 50 years, because what we were finding was, uh, two of the buildings and that I was immediately given to deliver, uh, were about 50 years old. They were both built in the 1970s, or late sixties. And they were reaching that point where, the form of the building, um, maybe the loud of the columns, the, quality of the glass, even the waterproofing around the facade was just falling apart and it was impossible to, just renovate to get value.
So we were able to look at the buildings and say, okay, it's about 50 years old. Let's knock them down. What can we build? Um, so the strategy then is purely around quality. assets in CBD locations to attract tenants and what are tenants interested in? So we knew that sustainability was a big goal, uh, for tenants, uh, for, our government has mandated a minimum sustainability standard of the building for any of the government tenants and no different than probably where you are.
Government tenants, public sector tenants are the biggest tenants of the market, not private sector tenants. and so everybody is now incentivized to hit a minimum sustainable time. We were, we were finding that there was a drive towards, things like amenities. People are looking at healthier culture, cycling to work, maybe trying to get rid of cars, uh, healthy means going to gyms.
So now what are the amenities in the building or around the building that are relevant? Uh, do you need, uh, retail, food and beverage? Yes. Coffee is huge over here. Everybody has their own personal favorite coffee and they make it themselves. Um, the end of trip or end of journey facilities where you rack the bike, you have a locker, you have almost like a country club style shower facility with towel service.
And the like, um, people were looking at, in the gyms, in the building or, or flexible, not flexible space in the coworking side, but, you know, flexible space that people could have breakout space in, you know, lobby, cafes, and the like, uh, where you would have meetings, a little business centers where people could get away from their desks.
Those were key things. and then in that space, we were starting to hear things around, I guess, specifically property technology that would enable some of those to function better or property technology that was helping you to better run your building and keep the cost of running the buildings and down both for the owners, but also for the tenants, because some of our lease structures mean that we pass through a lot of those communal costs to the tenant.
So, you know, the, again, it's a commercial thing where, um, and not many people talk about it, but if you look at the detail of at least, it explains to you what, actually is driving the tenant's reason to come to you, not just the rent, it's a whole bunch of other things, including, um, how much the building kind of how efficiently the building runs, because that gets charged back to the tenant.
Um, and then we were looking at technologies, like, um, so I've, you know, I've gone through, uh, efficiency, I've gone through some of the tenant engagement, elements, um, and then things that were actually driving. Um, Oh, and the last one was, we were hearing from the UK that they brought all the BIM standards into play.
So they were saying that potentially could this come to Australia where the government mandates that every building needs to have a 3d model. Every new building has to have a 3d model that will actually, have a end to end, Asset list, uh, structured topology and 3d visualization, uh, not just so that your facilities team have access to good lights, uh, documentation, but so that in future there's solid data against every building.
Um, it also improves planning and construction, efficiencies to make sure that there's less wastage on site because what's that phrase, uh, draw twice cut once. Um, and we know that when the builders are building even mechanical pipe work, they assume 10, 15% wastage because they know when they get onsite that they will into plumbing structure, et cetera, which then in the way, um, so they have to assume they're going to have to cut and run flexible pipes to different places.
If you can preplan all of that, you can come to site. Either knowing and installing without worrying about clashes or you can prefabricate modules and then bring us to sites. Prefabrication was one of those big drivers. So we understood all of that was coming. Um, now it's impossible when you're running a development to think of a strategy that involves all those random pieces.
But what you do is you, you start thinking, okay, I've got to keep that in mind at every step of the design process, concept process, the feasibility process I need to allow for the money. I need to make sure the designers are being given a brief to push. Tell us, give us an idea of what's happening in the market.
and then as we get sign-offs at different levels, we've ensured that everyone's brief to say, this is our goal. These are sustainable goals. These are our amenity calls, our design goals, these of our, spatial sort of, you know, goals. And then this is our technology goals. and even then no one was talking about property technology.
no one really acknowledged that building services are your property technology. They just started talking about Patek. Like it was a different bunch of technologies and actually it's just a different term for the same thing that we were doing all the time. Right.
James Dice: [00:20:40] Right. What do you mean by building services in that context?
Shen Chiu: [00:20:44] Um, HVAC launching vertical transport, access control, uh, security, all of the, many subsystems that would run a building. we call them, I guess, building services. Um, but even then I years ago we had, the IOT, we just didn't have it in the way that we have it. Now we didn't have as much, I guess.
Um, well, we still had issues with, uh, I think the police still using the blue cables, the, the, cat cat five cables.
James Dice: [00:21:11] Yeah. So you did those two developments originally. And then how things changed since then? I'm sure they've
Shen Chiu: [00:21:16] changed. Yeah. So, what was interesting about the two developments where they were running about a year apart?
So we had a, uh, we call it an A-grade building. Um, and our grade goes C D D C B a and then premium. And in the cities generally, you only build a grade and premium grade building. So we had an eight grade building running, and, it was a good time to formulate all of these ideas and actually implement, strategies around delivering what we were looking for that best building.
Uh, but through that processes, as consultants, we're bringing to us more of these technologies, we were trying to implement probably the first, virtual 3d model all the way through to five D bin. Um, or even beyond that 60 beam, I think we were talking about back then, um, on the second project, what was great was everything we didn't do, right.
Or everything we were able to use hindsight on, we were able to implement in the second building. The second building was a premium grade building. Double the size of the first building. Um, and so we were able to take all the learnings and that became probably our, what's that word. how landmark building for smart buildings, um, and things have changed massively through that process of delivering those buildings.
Um, We went through design. We started getting consultants in bias. Guess what was happening? We're starting to see value in some of these new technologies around spatial utilization, around, building apps around, um, IEQ. Well, well, rating came out during that period in the, in the mid sort of 2015, 16, and we had to adapt very quickly to a new rating system that was driving health and wellbeing, which we knew was important to our tenants, or was important to tenants to come.
And again, setting up a building over a seven year development window where you're guessing what the next 25 years will look like. Uh, you know, you're lucky to be able to guess what, what you're doing next week, but you know, you're trying to find this, what will the building be like, what am I specifying on day one?
How do I keep a broader, you know, almost umbrella strategy. That means that in five years when the building is developed, even though I've specified. Technology amenities, a design five years before, and it's locked and loaded. And in five years time, I'm not immediately out of date. How do I ensure that?
And so, whereas design, you can, I guess it's well established. The practices of good quality design will stand the test of time. Some of these technologies were so new, that we were trying to not in the first building, we did a number of, I call them point solutions. We specified a number of like a lighting technology.
Um, we were very early days with the mobile credentials on our access control. Um, we put in a number of different, I guess, analytic tools, to look at energy management and the like on our BMS. Um, and we were just guessing we were going directly to vendors. We were finding products.
We thought were worth a go. And then we were putting them into the building. Um, on the second building we realized actually, Hey across a portfolio, that's not scalable. You, you need that. You need to definitely need a strategy that gives you an end to end. Plus, how do I scale that across our portfolio? Um, you need to avoid point solutions.
You need really more of an umbrella strategy that allows you to plug solutions in when you want and pull them out the same issue around why it's difficult. Having a single BMS provider who provides every single other device security and access control, and the like, to then find that when you want to change, you need to change every device.
You can't just change out the BMS. You gotta change every single sensor that they connect to. Um, because they're all talking to each other in an ecosystem. Uh it's I guess it's the Apple versus other, ecosystem sort of question. and so. we, we then started paring back from point solutions and then looking at a much more holistic.
Okay. Let's set up an ecosystem. Let's set up a client based ecosystem that allows us with, with some high-level principles. everybody must be able to plug and play into our ecosystem, which means that our data protocols and ontologies, you know, typologies that need to be agreed. Uh, the, the consultants a better at specify that, but we need to make sure that at least three vendors that can supply to that requirement from the market, then we can go to tender and we can make sure there's always competitive, tender.
There's always competitive product. Those products. We stand still need to make sure that they have some. I guess history you're the last thing you want is something which is a critical system failing because you've got a one year, two year startup, which might have the best system ever, but they go under, who's going to support your ongoing use of that system.
So there's certain critical systems that we, need and we do need, uh, vendors, safety, maturity, uh, you know, tried and tested. And then there are other, um, I guess more interesting, modern cutting edge solutions that might be of value. The other thing that is really different about every country is that in Australia, we do something called a warm shell, fit out where we speculatively fit out the inside of our office buildings with ceilings.
Um, floor by floor services, you know, the loud or the pipe work, um, lighting, et cetera. And we put carpets down, um, in, in America you do a cultural fit out where you stop a lot of those in the core, and then you leave it to the tenant to fit out the ceilings, the floors, et cetera. And the, the interesting difference in that is that, in Australia, we have to think about what the tenant might want in their floor.
So when we're offering them a floor plate, we might think about sensors in the ceiling for movement tracking or for IEQ censoring without knowing their final fit out. And we have to take a punch on that and we have to invest money in that upfront. And so we need to understand what we're putting in, which is why it's even more important that we have, I guess, this umbrella strategy of, You know, building an ecosystem and letting these things plug in.
So if the tenant then says to us, actually, I don't like that. I've got my own visitor management, visitor registration, I've got my own, uh, you know, people tracking utilization or IAQ sensory or the like, or booking system. How do I plug my system into yours? You know, how do I get a credit for that? How do you install it for me before I even come to the building?
Um, whereas in America you can pretty much stop and say, this is my line. And then you, Mr. Tenant, you do everything inside the building, which then drives different solutions because a tenant will go for point solution because they're only doing it for that one tenancy. We are thinking about how do we do it across 40 buildings, you know, in a million square meters or, you know, 10 million square foot of space.
We need to have that broader strategy. Anyway, that was a really mixed answer with no clear,
James Dice: [00:27:57] No, I actually have a couple of questions. So when you, you mentioned how the first building had like primarily had point solutions and you went away from that.
So I want to key in on that, because I think at least from the projects I've worked on and I think the general status of this States, at least, and I'm not going to speak for the rest of the world is that that's kind of the state-of-the-art, uh, is, is, is point solutions everywhere. And that's like a lot of people's definition of smart buildings.
And so, I mean, obviously not listeners of this podcast of course. Um, but, um, but I want to hear from you, like why don't point solutions work from that holistic portfolio perspective?
Shen Chiu: [00:28:39] I think, um, you know, people will use the phrase. A single source of truth and a single lens dashboards where you can see how all your buildings are operating across your whole portfolio, rather than just one building.
And what we found was, every time we engage a vendor directly, they didn't just give us their technology solution. They gave us their own, online cloud portal. and they gave us their dashboard. And if you think about how difficult is, is to set up a startup, if you imagine, you know, you've got these great technical guys, so maybe going to build hardware or software, and then they have to then become designers because they need to build a dashboard that speaks to all clients as if it's everything.
And the same problem we have with a BMS and a, you know, lots of subsystems with their own headends and their own engineering pages is that, We've got all of these disparate systems, which have their own dashboards and their own representation of information. And then every time you go to a brand new vendor, you get a different version of that.
We all want would like it or not. We want windows. Interface. We want icons. We want the Adobe suite. We won the Microsoft suite. That's why these things are so popular because everyone knows them where they go. They get the same thing. And so within a business, even though we met, I'll be able to say that for every different business, within a business, we're going to, to one, our facilities managers, our operational teams, our property managers, our developers, to look at same format, the same layout, the same presentation of information in the same way, uh, because we can make better cognitive decisions.
If we're not spending all our time working on what we don't know, it's all in the same place. It becomes part of our workflow. So point solutions are difficult, not just because they often run with different data protocols and, proprietary, you know, licensing agreements and costs plus their own web server and cloud costs as well as their dashboards.
You know, they're all of those. Uh, disparate and they, they need to come into one system. So what we really want is one ecosystem, one pain, a one view, and yes, you might have to jump out to do the engineering, but in terms of what most of our operators use while it's arguably a alarm respond system, we're going to always want a singular dashboard.
And, you know, I often talk about, when I want information, I need three types of information. I need the information that is at the technical level. Cause the consultants and designers, the builders might need that. I need information at my level where my team as a developer sees it, but we're, one level removed.
We don't want to see all of the detail detail. We want to see a summary of that. And then I need another version. And that's the version for the board and the investors. And they really don't want to see more than one or two items on there. And it's usually cost related or key risk related. Um, you know, and so those different versions means that if I get a dashboard from this vendor and all these disparate systems, I have too much information and someone has to dissect it and someone has to interpret it and someone has to put it all together.
So we went away from point solutions, you know, primarily because we have a portfolio. And once you have a portfolio, you need to think about the bigger picture of, of new buildings, consistency of approach for all of those buildings and consistently of approach down to every existing building because 95% of our portfolio is existing buildings.
And, and you're going to need consistency across those leads to a whole new conversation around the fact that every single one of our buildings has a different BMS anyway, and, and has exactly that problem. But at least as a strategy, that is the light, that is a better strategy and the right approach for growth and for sustainability than it is to have a whole bunch of point solutions.
Totally. I love
James Dice: [00:32:22] that. And anyone who's taking my course right now is probably smiling, listening to you say that we have a whole video that, and I'll put the slide in the show notes. Um, but you basically just described perfectly as that's why I was you. You can see me smiling, but everyone else probably can.
yeah, that's kind of the state of a lot of different portfolios right now. So, cool. So you mentioned the board and kind of boiling things up for them. I wanted to ask from a program perspectives. What's the business case here for this smart building program within, within investor for, for new and existing?
Shen Chiu: [00:32:57] Um, yeah, so like, I'd love to be able to say even now often ideas sort of delivery process for, for two of our, you know, kind of key buildings, um, with a lot of technology that we had a very clear ROI on all of our. Returns based on the investment, we've made a bit technologies. Some of those, we were lucky in tendering to the market.
We were able to get. Um, the, the market to actually not price in any more costs, because some of it was just good practice to say some of the, creation of, um, ontologies and typologies and actually tracking data, pulling together into, you know, asset models, pulling it together. It's a three-dimensional model.
Something that didn't, it doesn't cost you any more money because that is good practice and it helps, uh, the builder. Um, but in terms of ROI, we've always struggled. We are only now one or two years into live operational buildings, pulling together all of the different use cases that prove up that, those value in the technology that we put together.
Um, we don't have. Hey, simple metric that says, if you do X, you will get a 25% saving on Y thus, there is a return of this dollars. Uh, we, we don't have that simple ROI. what we, what we're finding though, is anecdotally, as interviews I've had with facilities managers, uh, with property managers, with builders, with vendors that they are saying, when we plug in a analytics program, it is easier to access your data and it will cost you less than it would.
If you gave us a traditional building where the BMS points are done by one supplier, there's another supplier running, you know, your lift points, you'll your Hatrack points will access control points, and your security they're assigned. That is cheaper. We can reduce the cost by. You know, initially let's say 25% off the top and then slowly even better.
Um, because, they can access the information more easily. We are having engagement discussions with tenants where they are saying, look, this is great. This app that you've given us, it gives us control of our lockers parking access, you know, straight to our door, plus all the community information.
means driven. COVID we were able to keep engagement with staff at home, through your app because they were already using it. Um, obviously we using our analytics, against use of the app, uh, number of sign-ins against the number of access cards that have actually been given to people in the building.
Um, and some of that information comes back from office managers, for tenants, from tenants directly writing in about different events, different functions, uh, different use cases that they've actually enjoyed. And so we're collecting all of that in a, in just a big repository of, you know, wins. and. What we could do better.
so I think this is an intuitive process. Um, going up to the board, one of the things which is difficult for existing buildings and possibly easier for new developments is high investment in technologies. And where we've gone is these use cases tell us where the real value is sitting, uh, the alignment of data, the, the savings and outgoing, for lease and for tenants, the, the, the improvement in the, the day job or workflow or responsiveness of our operations teams for problems that occur, uh, our ability to almost be more proactive in.
Identifying a problem before it turns into a failure or a fault, or a problem that's going to happen, uh, tuning the building, those sorts of cases, those use cases are being pulled out, understanding the alignment of access control data with lift data, with, you know, HVAC data is a good one to give us a bit more insight into people in the building and how the building is operating to deal with people when they're in the building.
Um, and now how all out is, is taking those steps into existing buildings, because we know it's hard to invest, uh, large sums of money in existing cap programs, uh, investors and the board rarely give approval for significant sums of money until something is broken. so, having those use cases shows that it's worth in fact, investing in keeping those buildings as.
As close to what tenants want as possible by introducing. And in our case, mobile credentials on exits control is going to be a big one going forward. Um, having the ability to have, a across portfolio building up, but no matter what building you go to within our portfolio, given that a lot of our tenants are in multiple buildings in different States, they can just walk into another building, have the same app activate and get access control.
You can't do that unless you have a ubiquitous system across all of those buildings, you can't have a whole bunch of different access control points. Uh, cause that's why we all end up with, uh, those whites, access cards. I mean with five. So every S as a national development director, I traveled between three or four States regularly, or I did before COVID, uh, I have four or five of those cards sitting in my bag and I just have to, I've lied on them and building, and then I go and I tack them in each building to get in.
Now that's just not that we can do better. And that's one of the things we know we want to do better. So that's one of the items and then having, I guess, open protocols and a, central network, uh, you know, an integrated network comms network across the whole building. So that irrespective of PLA we want to plug and play.
I mean, that's a great term that I guess Microsoft came up with years ago that plug and play concept. So BMS provider is no longer meeting their KPIs on, or maybe it's out of date or we want to update it. We can plug them out. Pull them out and then we can plug someone else in that's what we need. And the only way to do that is that an integrated communications network across and, and then clear standards around, you know, protocols, data protocols, and what people can access and what they can't, who owns the data and then having a data Lake.
Yeah. Hopefully not a data swamp strategy where you actually pull that data in a sequenced way. Um, I still think we should have structured data. I hear the AI and ML guys saying you don't need structured data on instructors. Fine. Cause we can get into it. It's like filing your emails. It's still easier if you structure it and think about structuring it than just, just throwing everything in one place and hoping you can search for it later on.
James Dice: [00:39:01] Yeah, totally. I agree. Um, So it sounds like the business case is different for new versus existing, which makes total sense. On the new side, it's kind of fighting with the incumbents around, not fighting, that's the wrong word, but fighting with the accumbens on getting it down to what it would be without the technology.
Um, and then even if it costs more, it sounds like you're making the decision that this is what are our tenants want. This is what our clients
Shen Chiu: [00:39:25] want. Yeah. And that's always the case. Yeah, absolutely. That's always the case with majority of our, um, I guess drivers like sustainability amenities and design, et cetera.
You can only guess what the market is going to pay you back for. You take your most educated guests. You sound out the market, you talk to your tenants, you get feedback, you'd watch what's going on with trends and topics. Um, but these are all still guesses. There's no hard metric around most of these, benefits or tenant and prop technology is, is no different than that.
It's probably about, we think there's good. Three to 5% in a truly integrated technology stack in a new building of construction costs. You will probably add three to 5% if you, if you want to do a really integrated technology stack, but that's, you know, that's doing everything. You can pare that back to the, the, the, the ICMs, which are now, you know, probably ubiquitous, everybody's delivering an ICN and the new buildings.
Um, and then it's about putting together the Y sort of, I guess, performance requirements around, Data standards and the log. Okay.
James Dice: [00:40:27] How about on the existing buildings? How do you think about you have like your you've defined out your standards of your smart building program, and then you have what you say, 38 existing buildings that have like varying degrees of disarray I'm sure.
From
Shen Chiu: [00:40:41] that perspective. Yeah. Yeah. We, well, it's a slimmer, mover. Most of those buildings are just making sure that they're, they have a good EMS, um, energy management system and make sure that they've got an analytics provider. we've now got a national, provider, um, actually doing analytics across all of our buildings, helping to optimize, helping to look for, you know, fault detection and et cetera, as well as, you know, analytics for optimization and tuning the building to run more efficiently.
We have a national provider for that, and that is allowing the buildings to at least. Be as effective and efficient with the equipment and devices they have. Uh, and then we've got a parallel program that's running to making sure everything could rebuilding has got a, you know, a, an integrated comms network setting itself up for the future.
Um, and then our other strategy, you know, in tears of importance is then making sure that those buildings have certain minimum, data, drags, which are possible. One of them is from the BMS that we need to get, to pull all the data and whatever data is available, whatever data we've got within our, I guess our BMS, the licensing agreement to pull and input put into our data Lake.
And the last part is, we believe there's a heavy alignment of the people movement and people usage of the building. So access control through both doors, as well as lifts. Is where we're getting the, the other alignment of information, uh, short of putting maybe people counters, which again can be difficult because it shows you people in the lobby, but not necessarily people going up to their floor, whereas lifts do.
And we have in Australia, we pretty much all have destination control lists, which means that everybody who goes to a floor will click a button. Uh, no one will realistically go stand behind someone else and go, Oh, you're already going to level seven. I'll get in the lift with you. Cause they won't know they're going to level seven because it will just be less safe and they'll go, Oh, where's Lucy going?
I have no idea. So they have to press a button. So the, the, the, the collection of the data of a pressing the button. The floor that that person is going to gives us good insight into the people moving into tendencies within that tendency, we can then get the data of the performance of systems within that floor in terms of energy usage, lighting, HVAC, et cetera.
And then we can align that to how do we optimize the space for that tenant based on usage? Um, so we're, we're, we're finding that sort of, I call it access control is one of the key pieces that talking to the lift guys, and, uh, and, and then making sure that we have the ability to access the data from the BMS.
And that's our kind of core strategy on existing buildings at the mug. Totally.
James Dice: [00:43:17] And, uh, and one of our listeners, Joe is gonna kill me if I don't ask you this, how do you fund that for an existing building when you have, an existing investment, right? That, you know, there's certain expectations around operating costs and capital costs, for your investors.
Shen Chiu: [00:43:33] Um, I don't know, a lot of business cases and really carefully. Um, part of it is, is an education led. Let's say that the, the, board, the investors they're, they're not experts in this space and they're not meant to be, they are reliant on us as experts and us as a building owners and managers, to advise them of where things are going to make, uh, is going to find, we're going to find the Delta, where are we going to find the difference and going to help them?
Um, and traditionally you might say, well, until you prove up an ROI, I'm not going to spend any money that might work for privates, privates, who the money is coming out of their own pocket. But in, in, you know, institutional investors are a little bit more broader in, in their, their, their recognition of, you know, trends and topics that will actually make a difference to them.
So, um, they, they're not. There to squeeze every dollar. There is always a CapEx program that has to be, they're usually based on maintenance, usually based on longevity of equipment. And our CapEx program is usually set up for building, um, and, and runs for, you know, 10, 20 years. And you're constantly chipping away at that, uh, tenant demands, tenant vacancies, as tendons leave.
Sometimes you need to reposition the building, you need to do something new. Um, so all of those come into the piece for the business case, that talks about how the building's performing, how it's performing against its peers, or even the rest of the portfolio. Um, do we need to do better? And then why do we need to do better in what areas do we need to better?
Uh, and then that becomes a little bit more, uh, qual qualitative around trends and topics, feedback from, uh, agents feedback from other tenants survey information, and, I guess, successes in other buildings that we've had, and then saying slow education about why some of these technologies are valuable.
James Dice: [00:45:11] Absolutely. Very cool.
Hey guys, just another quick note from our sponsor nexus labs. And then we'll get back to the show. This episode is brought to you by nexus foundations, our introductory course on the smart buildings industry. If you're new to the industry, this course is for you. If you're an industry vet, but want to understand how technology is changing things.
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I want to circle back to the buildings are developing and just a second, but on the existing Golding set, only the last question I had was how, how do you guys just think about engaging the operations teams? You mentioned analytics. So one of the biggest things for me is if I'm a, if I'm running a building, right, and you you've mentioned all these different software systems, I have to log into that.
Tell me there's so many different tools, so many different things going on. How do you get them to engage in an analytics program? Um, and how have you kind of thought about rolling that out and getting stuff to actually get fixed?
Shen Chiu: [00:46:25] So, so, yeah, I, I, I think, uh, the first time as a, as mountain analogy, uh, the first time we moved offices, you know, in our business, we hired a full-time change manager.
And I remember saying, well, what do we need to change Bennett for? We were moving from an office where we've got desks and we've got computers to another office with desks and computers. Why do we need a change manager? And they sent me on a course. They said, obviously you need some edification, Jen. Um, because.
People. Um, there are three types of people. There are people who embrace the change. Uh, they love the change. They see the positives, the half glass full of all of the, you know, cleanliness, new, shiny, whatever new location, et cetera. And they will embrace that change they're advocates. So you don't need to convince them.
You just need to keep them informed of the journey. And then you got the people in the, uh, in the other spectrum fully to the other side who are always going to be negative and they'll never support. Whatever you do, because I don't like change. I don't want any, they don't want that. You can only keep them informed, but it's very hard to pull them into the mix.
And then you all the people in the middle and these people in the middle could either fall into the negative temp or fall into the positive camp. And it's how you engage with them. Uh, which will really make the difference. And that's the 70 percentile sitting in the middle. And so change management, uh, requires you to, um, engage those people as heavily as you can.
with information that's relevant to them with a briefing, with, relevance of, You know, their day to day and how that affects them and the positives of that. Um, you get them involved in making decisions that actually affect the, they themselves tell you the spec or the brief of the final. And this was just to change offices from one location to another, with, you know, uh, different types of deaths.
I mean, we went from, uh, these kind of jelly beans, shaped three people, module desks into these flat desks and, you know, sit, stand desks and stuff. And I was like, well, surely that's a good thing. Why do I have to train anybody? And they're like, well, because some people will go, well, that's too difficult. I don't want to press this button then, you know, why is the desk always changing and why am I going to a desk?
Which is not always mine permanently. There's a lot of, you know, I guess getting used to that. So it's a change management process. And that was, um, you know, before we even moved buildings, we had a year of that. Even letting people select the type of chairs that they might move into. So we go well that into, facilities management.
And you say, you've got people who are now, you know, have literally been doing what they've been doing potentially for 20 years. Um, are they in that. Yeah, negative camp. Are they in the positive camp? Is it the young people in the positive camp? Is it hard to recruit young facilities managers because it's, you know, a job which traditionally was something that evolved from someone who was probably working on the building as a contractor, almost into a role where they became the most knowledgeable person, because they were fixing constantly fixing all these different bits of equipment to now this kind of traditional thing that we understand as facility manager, or are they white collar educated people who've come out with degrees in mechanical engineering or controls or low electrical, electrical engineering, which means that they actually see a real future in, I guess, machine learning, using cognitive thinking and making decisions that actually inform, you know, much bigger changes using this software.
So all of that has to come into the piece. All we can do is assessing our team and we've got a mixed breath of all of those people, uh, is that we engage them early on with what we're specifying and why we make sure that what we're doing They've had at least constant eye over and made sure that what we're offering them as a tool is something that they see value of.
And even if we're going to go do it anyway, we make sure that they're part of that process of the implementation. And so they can at least add little bits of where the relevance is. Um, and then we've done a lot of training posts a year before handover of the building where we, where there's a lot of handover training of using the equipment, playing with it.
You can't break it, just play with it. You can't break it, just play with it, um, all the way through into now you're using it. Um, have you tried using that tool, you know, have you constantly checking in, are you using that tool for that? Or what are you doing differently? Are you using the old tool? Are you using the old way where you look for a CD with a copy of the file?
Are there there's my information or have you used a tool to do it? If you've got a problem. Did you check whether that particular device had flagged a problem, maybe in a part of the dashboard that isn't apparent, ah, do we need to bring that to the front of the dashboard or do you need to check more things?
Does your workflow need to change? And that's a really, it's just a slow person is an education, um, engagement. Some people don't like it. Some people will leave the business. Some people will feel threatened. Um, there is no, even with our smartest building, in terms of, technology enablement, um, we didn't lose any staff.
We didn't replace any staff because of it. Uh, I think that in many ways have shown a lot of the, the, the FMS that it's about them getting the best and making their life easier. Not about replacing them maybe in many years to come, there'll be this, ability to have less people do more. Um, but we're definitely not there yet.
Um, and we definitely have a lot of team members who are super important in managing our buildings, operating our buildings and never get thanked. They're the ones who get blamed if things don't work, but never get thanked when things go well. Um, they're the ones that were just spending more time now, especially at the backend of projects to engage with.
And then I guess the new developments have given us the benefit of seeing that engagement with the same team members, um, seeing their use cases and then bringing that back into existing buildings. So they can be the advocates to their own peers in other buildings rather than, you know. Well, what does the development guy know about running a building?
You know, the only reason I know so much about running a building is because. I've gone into the, the, the, the nuts and bolts and spent time with the guys, walking through plant Williams, understanding their issues both early days and all the way through to now. And you know, that's really important with that change management piece is empathy.
Everyone's got it. Everyone's got a tough job. Absolutely.
James Dice: [00:52:20] How have you guys looked at, or have you done or set up with analytics across that many sites? A centralized operation
Shen Chiu: [00:52:27] center? Yeah, we're pulling that together now. Um, so, that will require a number of buildings to, Go online with a live data streaming to a certain place.
And then we'll get to, I guess, select what that dashboard might look like. I think there were a number of providers, um, who are offering that I think Willow, that you know of is one of those who who's offering, um, almost a portfolio based dashboard, for multiple buildings. And we're definitely considering that, as well as others to ensure that we've got what we want, are they able to manipulate it and change it?
So that presents the information we need, uh, or is it sort of, you know, a static dashboard, um, are the other providers who are able to do that and are they able to get the data. Or do they need us to have already housed the data and then they pull it from a central place. So there's a few questions there, but we don't have a centralized, you know, it'd be lovely to have that sort of mission control and NASA center where everything pulls into one.
Um, but we don't have that. That'd be pretty cool. Actually, I look forward to that day with all those screenings and all the information and Ben had just walk the board members through and everyone goes, Oh, look how run. There's no red lines. There's no red dots. Everything's perfect. I saw that. I saw that.
at Microsoft. uh, rock, they call it the, the real estate operation center at Seattle. so that's, um, even Microsoft took us into their CCC, their command and control center for all of the, as a cloud stuff and that huge NASA style window of information.
Um, you know, just amazing, but, you know, we're, we're, wearing away from that, and there's a lot of money invested in best mental required to get to that point. Probably more importantly, as long as we have a consistent dashboard for each of the operators in their building, that would be our step one.
Before we brought it into a central place where we can run it all in, we see is at the moment when people have a problem, it's usually a technical problem and you needed someone on site. Do we want to wait for, uh, centralized body to drive out there? maybe that's fine if your Microsoft campus and everybody's in one place, you can just drive to the building and you'll get to go.
Uh, but not so easy if it's in a different city. Um, you know, we're just definitely not there yet. Totally.
James Dice: [00:54:38] Um, let's circle back on to two new buildings. So teaching this course right now that I told you about before we hit record, and I'm getting so many questions , um, around new buildings, asking about how, you know, there's a kind of this movement towards division 25 and there being a master systems integrator, um, at least in the U S and having someone be responsible for bridging all of the silos technology silos for a new building.
And what I've been asking, getting a lot of questions around is, okay, well, what if that role is not in place? What if it doesn't have teeth? What if the owner doesn't understand it? What if the developer isn't like taking certain responsibilities here and there? And what I'm getting at is like, yes, we might have that spec, but is it well written?
Is it mature enough? Is everyone buying into that role? Um, and so I wanted to ask you, like, after you built these buildings, Or like the keys to building a smart building, I guess. Uh, and what have you learned?
very rambling
Shen Chiu: [00:55:41] question. No, that's a, that's a, that's a great question, James, in this of different threads of that. Um, so in terms of say a community, there's an argument to say that we need a bunch of standards, maybe a half a dozen standards that everybody does. Um, and that might be about OpenData protocols that might be around, um, integrated networks.
It might be around, Data that that is then stored somewhere. Um, and everyone agrees that, you know, when we go and produce a new building, that's what we all should do. But the reality is everybody's looking for either their edge or every advisor is trying to make sure that they have a smart building advisor needs to make money somewhere.
And if that is a standard document, that everyone just model off the shelf as if it's a template, then there's, there's a lot of people who aren't going to get it. Yeah, the nuances of what they want. Um, and maybe we'll always get no answers, but you know, competitive advantage people will hold back some of the information.
So, so as much as I'd like to think that community will come together. And I think it does at a technical level, but at an investment level, majority of my peers, you know, don't really sit there and dive into the detail of smart buildings beyond a couple of broad statements. Like I was thinking, if you would ask me the question, what do you define as a smart building?
I'd say your time. So I don't, I don't have a single one-liner 25 words or less elevator pitch about what a smart building is. What I do have is I say, every building is going to be different. And what value are you trying to get out of it, then I'll tell you what the smart building looks like. I can't tell you what it is.
I don't know. It's is it, is it to do with tenants and engagement? Is it to do with, um, Investment metrics to do with sustainability is it to do with, so there's all of that, but I, I don't really want to come up with a nice little one line of a one star building is, um, I want to say what's the value for that, that business, uh, in terms of what I've learned.
I guess you need a champion at the developer investor side. Someone is making decisions which costs money, and someone has to be able to find that money. Every time you make one of these decisions, it is different. It's changes, something that costs something. If you don't have a champion from the client side who actually takes ownership of that decision-making process understands enough about the question you asking, you know, um, you will, you will generally fail because a client, a consultant, or an advisor who is, or a vendor.
Is only going to do what they know or think is the question. If you're a vendor or consultant, I would encourage you. If you don't have a client who is, I guess, informed is to keep asking that question every time you're about to do something, ask the client, is this valuable? This is why we think it's valuable.
Is there anyone in your business we need to talk to who may agree or disagree with the value of this is in an operations person. Isn't a property person. Is it an investment person? Is, you know, someone in leasing, if you don't have a client who is the arbiter of all of that information, you need to ask that question.
You need to keep asking that question. You need to be proactive. You can't just wheel out the last version of what worked and slap it onto the next client. And that is the biggest. That is the, the, as, as an ex consultant, the best consultants are the ones who actually proactively ask the client. Questions to ensure that they're giving the value that the client needs.
Even if the client doesn't know they needed it. Um, and you will, you will probably find for many years you won't have these champions. Well, what I am finding is that the community is now made up of a lot of smart building, um, smart building leaders in a business. They're usually a team of one or two.
Yeah. Yeah. So as a, as a team of one or two, they just don't, um, they don't have the bandwidth to work across everything to, to come up with everything. So that's still good, but per project, you need a champion. The client usually needs to allocate a champion, whether it's a development person, whether it's a project manager or someone that champion need to know a little enough, enough to be dangerous, but not enough to be, you know, to make really bad decisions.
And then they can guide and curate and facilitate the discussion. But that champion needs to be there. And if you can't get it from the client team, then you have to hire it. Hm, you need an advisor. Who's that champion all the way through. And they need to sit all the way through to construction operation at handover.
If they stop off at any one of those points, the person who had the vision and worked with the client with the vision, doesn't have that all the way through to the other side. Um, and, and that, that becomes a problem in itself.
James Dice: [01:00:18] Totally. I love that answer. I totally agree. So that smart building. Champion doesn't need to be like the most technical expert on every silo, every building system, every technology. Right.
Shen Chiu: [01:00:34] So how,
James Dice: [01:00:35] how do you, play that role, I guess, and still enforce things like, just maybe use a data model as an example at the end of the building, you want a common data model across all of the different devices you've, you've mentioned in different software systems.
Right. So what's your strategy for sort of making sure at the end that that data models there, when the champion doesn't necessarily need to understand ontologies, right? Mm mm,
if we need the champion to understand ontologies, then we have, uh, uh, inherent lack of scalability and just the, the whole smart building
Shen Chiu: [01:01:09] concept.
Yeah, it's um, again, I guess the UI, the champion needs to just know enough to ask the why questions and facilitate the, the, the team, like a, like a conductor. They're not they're playing the strings or, or, or playing any of the instruments. They are actually just conducting all of that. So they need to have an overview.
Um, there is always going to be a place for, um, probably a smart building advisor, no differently than we have an ESD, uh, advisor who actually runs a ruler over, sustainability questions during design all the way through to certifications at the back end. And arguably that's what you're looking for is a self audit certification by that smart building advisor.
Of what you've produced. So once you started with what your roadmap was, what your goals were, and then they need to check that that's what actually is delivered that needs to be written into the procurement of the builder. And that needs to be written into the builders of its sub-contractors because remembering that builders, that build the HVAC system, that's done by sub-contract to installs HVAC system and that HVAC person with the controls person, with all these other people, someone needs to audit what they're doing.
Um, ideally the best way is to do it via, Technology. So in one of our implementations, um, the tool we, the, the company we use and the tool that they used had a way of checking that all the data was entered in, in the right fields, in the right format. It wasn't flawless because we had a few, uh, sub-contractors game, the system, they worked out how you could put in random zeroes and A's, and B's, and you could self populate and you can just upload the same PDF every time.
And it wouldn't, no, the computer would just go, it's assuming consumed, you'd put them on information in the right place. Um, but let's, let's let, that was it. That was more the exception rather than the rule. Um, you need an audit trail at the end, so, you know, I'm never going to look at. 10,000 points, let alone a hundred thousand points of data that makes sure that someone's put in the line information in my place.
so, so you do need some sort of system that can do that for you, not a person. Uh, and then on the other side of, the specifications and the light level and quality, we are aligned on these communities building, these, these specifications. So when we were using our Toby schema, haystack was still on its name and license.
Um, and then brick came along, brick wasn't even around when we started it. Now we've got the, the digital twin data language, TDL staff, that, that again is creating different typologies and ontologies and the way this stuff is structured, but I wouldn't even know the definition of ontology if you hadn't written it on one of your posts.
Um, but, you're right. I don't. Want to know about that. I just want to know that the information we get will do the workflow or the insight that we want, and then I'm leaving it to the experts or consultants, et cetera, to create, or use those templates to then engage with a performance specifications, to get procurement done in the way we want.
And then someone has to order them. And that's why I still think it's the champion. They need to pull the right people in. You've got to do a peer review, um, no differently than I guess, tuning your building. You know, the, the, most interesting thing for someone like me to see at the end of a job is that everything that was intended to be designed and was handed over often when tuned, it's not tuned.
You know, the builder doesn't have time. He doesn't even have the people in the building to be able to tune it. So that new year after the two years after the winter, building's been tuned and final, tuning slash conditioning is done. you know, an optimization is done. That's, there's, there's a couple of years post pacing.
Um, and so, you know, that's why you still need that champion to be around, to make sure that the right information is being used the way it was intended, um, et cetera. So finding that white champion, um, and maybe it is a consultant because it needs to have a level of knowledge, as well as the person has another level of knowledge.
Yeah. And
James Dice: [01:05:04] that's, that's certainly everything. You've just said the two different types of champions essentially, right. Internal that has access to decision-making power and
Shen Chiu: [01:05:12] fundings, and then it would be more the sponsor. Yeah.
James Dice: [01:05:16] Yeah, yeah. But there there's two levels there. I think that I've been sort of preaching about in my course that, um, I've seen so many projects kind of die on the vine without one of those two roles.
Um, because the old ways of our industry kind of creep in, unless those two people were there to kind of, uh,
Shen Chiu: [01:05:35] root things out. Yeah. It's, it's all, it's tapped out, nudge, nudge. and just keep, keep it on track. Otherwise it just goes off on one direction and you know, someone, who has an idea just goes off and does what they want rather than necessarily what the client needs.
Yeah, totally.
James Dice: [01:05:49] Let's talk about IB index. Are you ready?
Shen Chiu: [01:05:52] Yeah. Yeah, sure. What is, um, so, so the, the IB index is sort of, I guess, idea was formulated back in probably around 2017. Um, it, it came out of a few different streams and, uh, from, from my side is as, as a co-founder of the IB or the international intelligent buildings organization was really to, to find, I guess, a better way of documenting all of the decisions because we needed to make around choosing, um, the smart building technologies or producing a smart building.
We started calling it intelligent buildings because smart had its own connotations. Uh, smart was almost synonymous with shiny and new. Rather than, you know, value, proven value. and, um, in my, in my side, I, started, you know, as you can imagine, coming through the space and being queried about, on what technologies to use, I just had a huge hit list of new technologies.
I tried to line it up with who was providing that technology. Was there always three providers. And what was I trying to solve with that technology? Was I trying to do, uh, increase value for the building, uh, smooth tenant engagement through a tenant attraction? Was it a sustainable goal that I was trying to tick?
Uh, was it, Security was it health benefits and the like, uh, and then I was also trying to marry up this kind of huge list of technologies with, uh, the maturity of the player in the market, because, uh, am I looking at something that will disappear and won't even be relevant in five years? Or am I talking about a critical system, where say, an IOT sensor on, on a chiller now, the chiller still has to work irrespective of whether I'm collecting all that data.
Chill is still has to work. Otherwise I have no air conditioning in my building. so I haven't the live version of this list. And as I guess my thinking evolved and I started working with, uh, one of the universities here, university of technology of Sydney. Um, they will also doing some, thinking around smart buildings, strategies.
They had done a lot of work around digital twins and how that evolved in the industrial market into, you know, our market. And we came together when we pulled together a, um, and we got some funding to pull together. Um, the IB index, intelligent buildings index, you know, it's been thrown out there as you know, is it a set of education is an open standard.
Uh, you know, is what isn't, but ultimately it's broken into, three pillars of what we think really constitutes come up with a smart building, and a smart building strategy. The first part is related to project lifecycle. Um, and it's all about project delivery, writing the white specs, having the wide road map, blueprint, process map, um, decisions around data, data typologies and the like data structures.
Um, the second part is around the devices and the equipment and, and what they're trying to achieve. Lighting HVAC, uh, waste, water, um, security, et cetera. And then the last part is we call it controls, monitoring and management, arguably one of the most, because all of that information, all of the equipment in isolation and we've talked about before just now, uh, is, is useless unless you can actually draw from it insights and in many ways, It's not just about point solution insights.
It's about integrated insights across all of these, uh, all of these different devices. And so we broke it into those three outcome pillars, uh, input pillars, sorry. And then on the outcomes rather than a binary. Yes, no. Do you have it or don't you have it? We've actually graded that into 15, um, sub categories of benefits to, financial benefits, to, um, environmental and benefits to social behavior, which is the triple bottom line.
And then we graded into good, better or best. So rather than giving it a very binary, uh, this is worth one point. If your habit is worth zero points, if you'd done it, uh, we actually feel that there are different levels of technology enablement. Um, you know, let's say for a light switch, do you have a light switch turned on and off?
Well, that's a zero in terms of smart buildings, but do you have something with an extinction, sensor that actually all extension switch that turns off after a certain time, do you have something with a sensor that turns off if there's no one in it after a certain time? And then do you have that in terms of, um, also includes daylight harvesting so that it's picking up external sunlight?
So then if you had a daytime, uh, even if you want the lights on, you may not need it at the same intensity. All of those will have benefits around cost efficiency, operational costs, but we'll also have sustainability benefits, health benefits, etc. Um, by grading that good, better, or best across those 15 triple bottom line subsets, we can get a lot of granularity across 200.
Questions now that we have, we have 200 capabilities across the product delivery across the device list or instrumentation devices, applications, and then across the controls monitoring management, and then the user of the tool would literally respond to those questions as to how they perform or, or their intended performance.
If it's a decision-making tool at the front end of the job, and then it would give them, uh, their, their performance gains that theoretical maximum. If you wanted to put the full tech stack in as well as a performance, or you could look at it in terms of, I actually want to do better in how I engage with, um, uh, my attendance more, I want to do better in terms of healthiness of the building.
Well, I want to do better in terms of sustainability outcomes for, uh, use of renewables or self-generation of energy or the like, and then you can filter the information back to work out where you've performed in the relevant categories, and then you can increase those that thus building your roadmap.
By the time you finished it, the first time you've now basically built a roadmap of what you want to produce and what value you're going to get at the end. Um, and then you can always use it as an auditing tool at the end to make sure that's what you've implemented. Or if you haven't, you can delete items where you have maybe procured it poorly.
The builder's not going to install it, or maybe the costs went there later on. Um, and then you can go back and then reorder it, the tool. Um, we, we feel that this is going to be just a really complimentary tool to smart building advisors, to consultants who actually talk about this. And in many ways, if you've got a, a team who can actually just populate it themselves, they can actually work out the decisions they want to make at the start of any project, whether it's a new build or whether it's a CapEx spend on existing buildings.
And that's basically the outline of the IB index. you know, there's, there's, there are other tools out there where others are building it. Uh, but the majority of those are very heuristic about trying to get you a gold or platinum rating. Um, Which is great as a benchmarking tool. You want to know how you stack up against other buildings, but the non roof integrated decisions across.
And like I said, the reason I don't define smart buildings as one lovely term, is it, it is different for every building and it's different for every owner. Um, and it's, never going to be comparable your building to another building. There is granularity that you need to get into. So, you know, my gold is going to look completely different than your gold and, a heuristic simplification of that.
Is great. If you don't want to understand the information, but I think the majority of people playing in the space need to make, because there's too many costs, it's not as simple as the sustainability question with a few costs. There are significant costs that could go in and then you'll get no value out of it.
At the end, you put all this technology in and no one will use it. Um, so the IB index is there to help. and we're just working through that. we had pre-funding from a number of startups. uh, Microsoft helped us significantly with funding. the kickoff of the main program. We did a lot of work on, on, on their campus.
Um, working with them Willow, my company that I worked for Investa, um, and then the universities as well. and we're started just trying to get to the point where we've got a tool that we can just let people play with. and then, and then kind of go from there. Cool. So
James Dice: [01:13:47] it's still in development then when can go use it.
Right now, even exactly
a
Shen Chiu: [01:13:52] spreadsheet. Yeah. So it is actually that it's in a very detailed spreadsheet. We'd love because pivot tables and filters at the moment. It's, it's a database of information that's been populated. Um, um, and, and lots of meta-tags. And you can say, uh, in the background to allow you to filter the information to different needs, whether it's a property manager or vendor or a facilities manager.
but at the moment, it's not something that we released out, we're trying to build up. Um, we're trying to build the application tool so that people can start playing with it and really see the value of it. Um, we've got a couple of proof of concepts with a couple of owners. who've engaged us to come on board and actually trial it on their building.
It's all, most of those are, you know, confidential. uh, but they're, they're interested in seeing whether they. Arguably performed as well as they were intending. Um, and then is this something that they will continue to use as their own internal benchmark against standards for their next development or the next capital works upgrade, or even whether they're buying a building and whether what's been salted is all value and will stack up in future valuation terms or, or, you know, uh, investment sort of value of the actual assets.
James Dice: [01:15:08] It sounds really unique because it's not like I mean, I grew up in the lead world where you could kind of install a bike rack and game the system a little bit.
Shen Chiu: [01:15:17] So it seems to print than that bike racks. I got it. Now you see, you mentioned backpacks.
I wasn't sure where you're going with that, but yeah.
James Dice: [01:15:23] Yeah, well, that's like the fame thing. It's like a infamous thing. Intimacy is a better word where the developer needs to get one more point. So then I would just like, Oh, spend $750 and throw in a, bike rack. No one's gonna use, um, anyway, uh, no disrespect to lead.
I lovely. But it sounds like a different approach. It also sounds like a different approach than you described it a little bit. I've looked at all of the rating systems out there and there's kind of a premise that's basically like there is one definition and what you're saying is it depends on the use cases that you're trying to enable and you can judge against those use cases, um, based on what you're trying to
Shen Chiu: [01:16:02] accomplish.
Yeah. You, you need to be able to, you know, you said it better than me, James. I should get you to survive the copy for it, but, um, that's exactly what the difference is. If you believe that there is an answer to the ultimate, um, Uber tech stack smart building. And you always compare yourself to that. Well, you're going to be out of date before you even deliver the building because it takes years to deliver a building.
And that keeps on moving. What you want to do is measure yourself against what you aiming to, to, to achieve, and. a more holistic idea of the value. Um, and then you want to constantly challenge yourself to make smaller upgrades. you know, if someone were to ask me some of the core elements, I think I've already told you that an integrated network, some sort of, you know, open data protocol, those are the kind of the core things, but I can say those, and then they're nice and sort of high level, and then someone has to go and solve it.
But in terms of implementing actual technologies at that granular level, you need to be able to check constantly whether they are valuable. What's the next valuable thing? How am I going to upgrade the building? Where am I going to deliver the best bang for my buck? And it is always money driven, even if, um, when doing lead.
And we do a lot of Greenstar here, even if we greenwash it, to find the cheapest way of getting to that point, you know, um, there's an argument to say, as long as you're doing it, it's good. you'll bike rack, single bike rack doesn't sound right, but, uh, let's decide better than not having a bypass. but, uh, yeah, we, we definitely want to steer away from a singular value chain because every owner is going to have a different value chain and it's always going to cost money.
So if finance isn't one of the value chains that you actually consider, how are you supposed to get this across the line? You know, how are you supposed to convince the board or the investors to spend money? Why is it so difficult to get some of the existing buildings to upgrade to sustainable standards?
Because there's a, there's an existing, uh, income stream and no one's going to spend that money because there is no, you know, Oh, we'll get better tenants and we need to upgrade this unless you have a portfolio strategy, someone's actually monetarily incentivizing you to do it, or they're incentivizing you not to do it.
And then, um, you know, you're not going to do it for all the Goodwill in the world. You're not going to do it. Some money will still drive the decision, but we need to align that properly with the other value chains of the triple bottom line so that we understand how they all benefited
James Dice: [01:18:22] totally.
I love that I had a bunch of questions around it, but you, you kind of answered them all. So, um, I guess I'll just go with, with my final question for you. What are you excited about in
Shen Chiu: [01:18:31] 21? Um, it's nothing to do with technology. It's, uh, it's, all to do with, uh, spending more time outside. Um, I haven't been snowboarding.
I haven't been snowboarding for a while and I'm jealous that you were able to go cause I can't travel to any of the places that I'd want to travel. So, um, I haven't been on skis or snowboard for a number of years now and I'm definitely feeling the bug. I'm watching a lot of Travis rice videos on YouTube.
Uh, watch the older. I'll never be in Alaska doing the stuff he does. Um, You know, I, I think connecting with people, you know, as much as the team stuff has shown us, we can do, like, still feel we're, a little bit too disconnected, you know? And, and, and in terms of, in terms of work, we've got some great new buildings in our pipeline.
Um, I guess I'm looking forward to more, so seeing how we can really roll out our portfolio strategy, um, and make some big changes. We're playing with AI and ML. Well, on a number of different fronts, to see whether we can find insights in the data streams that we're collecting, uh, across not just building data, but even corporate data to see whether we can do things better, whether we can find deltas, you know, that weren't otherwise obvious to us.
Um, But yeah, it will be, it'll be used, you know, I might well be retired before we have significantly aligned and structured data that we really get those values. I might be wrong. Um, things move pretty quickly, but then again, as you said, at the start, we are in the property industry and things seem to be moving very slowly.
Um, I can't believe that 25 years ago I was modeling three dimensional, structures. And twenty-five years later, people are still talking about whether there's value in coordinated 3d models. And why would we spend the money doing them? Uh, that kind of blows my mind, you know, 25 years ago, if we were doing it already, why are we still talking about it?
It should already be everyone should be just doing it. but yeah, that's a lot. And I'm looking forward to catching up with you face-to-face terms. I think that sounds like a snowball trip that the two of us need to have. Yeah.
James Dice: [01:20:31] Planning, uh, planning, uh, nexus summit. I think we talked about it a couple episodes ago.
I say planning. It's an idea at this point, not planning it all, but I need some help planning it. Um, but yeah, there are a lot of nexus pro members that are snowboarders and there's a couple skiers we'll let them come to. Um, So yeah, if you're wanting to, come to the nexus ski summit, you've got to join the membership so you can come for free.
So. Thanks so much for coming on the show. Appreciate
Shen Chiu: [01:21:05] it. And thank you very much, but it's a really impressive work that you're doing with the newsletter and the podcasts and stuff. So thank you as well. Yeah, it's great to have someone like you in the community, really leaning into it. My pleasure.
James Dice: [01:21:19] All right, friends. Thanks for listening to this episode of the nexus podcast for more episodes like this, and to get the weekly nexus newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry. Please subscribe@nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.
“I don't have a single one-liner, 25-words-or-less elevator pitch about what a smart building is. Every building is going to be different.
What value are you trying to get out of it? And then I'll tell you what the smart building looks like.
I can't tell you what it is... Is it to do with tenants and engagement? Is it to do with investment metrics? Sustainability? So there's all of that, but I don't really want to come up with a nice little one line of what a smart building is. I want to say: what's the value for that business?”
—Shen Chiu
Welcome to Nexus, a newsletter and podcast for smart people applying smart building technology—hosted by James Dice. If you’re new to Nexus, you might want to start here.
The Nexus podcast (Apple | Spotify | YouTube | Other apps) is our chance to explore and learn with the brightest in our industry—together. The project is directly funded by listeners like you who have joined the Nexus Pro membership community.
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Episode 47 is a conversation with Shen Chiu, National Development Director at Investa Property Group, and Co-Founder at International Intelligent Buildings Organisation, a nonprofit that is creating the Intelligent Building Index.
We talked about Investa’s smart buildings program, including how they approach technology on new buildings and existing ones.
Finally, Shen explains the IB Index and the approach behind it, including how it differs from other rating systems out there.
This was super insightful from someone who's living smart buildings every day.
You can find Shen Chiu on LinkedIn.
Enjoy!
Music credit: Dream Big by Audiobinger—licensed under an Attribution-NonCommercial-ShareAlike License.
Note: transcript was created using an imperfect machine learning tool and lightly edited by a human (so you can get the gist). Please forgive errors!
James Dice: [00:00:03] hello friends, welcome to the nexus podcast. I'm your host James dice each week. I fire questions that the leaders of the smart buildings industry to try to figure out where we're headed and how we can get there faster without all the marketing fluff. I'm pushing my learning to the limit. And I'm so glad to have you here following along.
Episode 47 is a conversation with Shen Chu national development director at Investa property group. And co-founder at international intelligent buildings, organization, and nonprofit that is creating the intelligent building index. We talked about invest in smart buildings program, including how they approach technology on new buildings and existing ones.
Finally, Shan, explain the IB index and the approach behind it, including how it differs from other rating systems out there. This was super insightful from someone who's living smart buildings every day. So please enjoy. Next is podcast episode 47. All right, Shannon. Welcome to the show. Can you introduce yourself for us?
Shen Chiu: [00:01:09] Thanks James. Thanks for inviting me along. Um, so my name's Shane chew on the national development director for a company called investor here in Australia. A investor until recent times was, probably the most recognized, commercial only real estate, uh, business in terms of developing, owning, and then managing commercial real estate.
Um, but a couple of years ago, Oxford properties actually bought 50% of our business and that's the best fighters into other sectors like built-in rental multi-family, uh, as you'd known over in the us. Um, cool.
James Dice: [00:01:43] Cool. And can you take us through your background? Like you said, how long have you been at Investa and what did you before
Shen Chiu: [00:01:50] that.
So, yeah, so I graduated, um, structural engineer, uh, practiced for many years as a structural engineer and, and then slowly moves, out of that into running some residential developments. and then into commercial developments, I joined investor about eight years ago, and, uh, interesting time, cause it was just after the sort of GFC, sort of a hit and we were all coming out of that.
and my background, in developments, uh, since then has really been helping invest, on a national basis, uh, develop a pipeline of projects, primarily commercial office buildings, and in this smart building space, uh, really working on that early formulation of a strategy and a roadmap to how we were going to make our buildings smarter, you know, and why we were trying to make them smarter and what that actually meant in terms of, the technology usages in the line.
James Dice: [00:02:41] Okay. You might be the first structural slash civil engineer you've had on the podcast so far. So
Shen Chiu: [00:02:48] normally we're pretty boring. And we sit in the background with calculators occupants. Yeah,
James Dice: [00:02:54] yeah, absolutely. Uh, and I also, I was stalking you and it sounds like you were, you were, or are a member of a ski patrol team somewhere.
You're it sounds like you're an avid avid skier.
Shen Chiu: [00:03:06] Yes. So, um, So when I came back to Australia, having skied every year from the age of about 18 or 19, uh, into my thirties, I, um, I found that Australia doesn't really have great skiing and it's a long way to travel from Australia to the majority of places, especially with a lot of my friends, uh, overseas in the UK and the, like I worked for the UK for 10 years as a structural engineer.
And you can just catch a Eurostar or you can fly out to the Alps and you can ski, you know, or even head over to the U S but so I'm in Australia and I'm trying to work out what to do. And one of my colleagues, uh, just happened to be on the ski patrol, uh, at our mountains. Uh, and he said, you should come along.
You know, I said, what you'll find is you'll find a good group of people. but they also are all very high-level skiers, snowboarders. And because they have to be at a good level to be able to be competent enough, to be able to rescue somebody in any condition. And he said, so you'll be around good skiers because the majority of Australians are not.
Skills. and, and then B you'll have, you know, an opportunity to just get out there for a couple of weeks, a year and ski and keep your, keep your eye in. And so I joined ski patrol, but, um, you know, my sort of claim to fame, amongst my friends is I've had the biggest ski accident of all of them, even though I'm the guy with all the, uh, the qualifications as escape patrol and first aid rescue and the like, and I've done lots of personal rescues of people, not even the ones that I had to do as a patroller and, and mountain rescue.
I actually have had to look after a number of friends, who've broken things and fractured things, and, you know, making sure that they're comfortable and safe getting down the mountain. I had to do it to myself. Um, and, and it was in the U S and, stupidly, skied into a tree, uh, off peso snowboard and into the tree of peace.
and then, had to, you know, get myself down the mountain, and, uh, safely back started Mendell stuck in hospital for about three months. Um, In the U S uh, with a collapsed lung, recovering. So that wasn't a great thing to happen.
James Dice: [00:05:04] Yeah. How did you get down the mountain with a collapsed lung?
How
Shen Chiu: [00:05:08] did that happen? So, uh, when, when you do, any sort of advanced first aid, you, you learn all things around shock and you learn all these things around the adrenaline. And, uh, you know, so it was sort of, first thing you do is, um, you know, having a known that I've seriously impaled myself.
I did a whole bunch of scans on myself to check my head and I wasn't concussed. I wasn't bleeding. Uh, you know, I hadn't heard my head and stuff coming out, my ears, all that stuff. Um, but I was in extreme pain and I started to shiver and sweat, and I realized that I was going into shock. but I was in a location that was really hard for someone to either find me or rescue me.
So I did what you have to do, which is I sucked it up. and, uh, crawled out of the hole. I was in, got back up in a lot of pain. I say, I, I, uh, I've never been in so much pain and I just limped my way down the mountain on the board, in many ways better than I was on the board. Cause both of my feet were strapped in and I just held one edge and pretty much leafed all the way down the mountain.
you know, it was not the prettiest. Um, I got there. So anyway, but you know, it's an interesting story though. The ski thing, because that time off from work, three months, pretty much in a hospital bed or, in a hotel room gave me a lot of thinking time, a lot of time to reflect on things that were important, things that I wanted to understand more.
It's like, you know, it's like going on a course for three months. I just started reading up and studying, um, things that I was interested in. That actually became even more valuable. I didn't realize when I came back to work, uh, because I was, I had to align some of my technology learnings thinking through that period and consolidating of those ideas into ways I can actually implement that in, in my job, you know, in the development space.
James Dice: [00:06:51] Cool. Really cool.
Shen Chiu: [00:06:53] Really cool. Really scary.
James Dice: [00:06:55] Really cool. The way you turned it around. Yeah. I have two stories real quick to, add onto that. So my claim to fame from an injury standpoint, when snowboarding is that I, the second dam or snowboarded, the first day I took a full day lesson. So that was great.
I was riding blues, the, you know, the first day I was ever on a board, the second day I showed up and hit a patch vice on the first run, got off the lift. First time without a ski instructor got off the lift. Turn didn't fall off the lift, which I was super happy about. Hit a patch of ice at the top of the run.
Not even, not, not even going on the run yet and broke my wrist.
Shen Chiu: [00:07:37] There were more people who break their wrist, snowboarding going through the car park and then bouncing snowboarders or risks and scares a thumbs and ACL.
James Dice: [00:07:50] Yup. Yup. And so now I have two risks cards, that I wear religiously. And if I forget them, I won't go. Um, but, yeah, I'm actually gonna, I'm actually snowboarding tomorrow.
We've got a couple of weeks left. Oh, well, yeah. and the other, the other story I was going to say was I have this like really strong belief that not enough people take sabbaticals. Um, and you had a forced out a little bit of a forced sabbatical, but I mean, that was the impetus for nexus. I had a really tough, job job, and I quit that job, you know, sold my shares in the company I was in.
And I just decided to take six weeks off and nexus came not, not long after that. And so I do, I do feel like, you know, seven, eight, nine, 10 years into your career and more like we need this time off. And it's just super helpful to even just like, get more general knowledge, take courses, do things like that.
Yeah. Anyway. Yeah. people that are listening. Uh, I suggest if you're thinking about it, just go do it
Shen Chiu: [00:08:48] anyway. Would agree. After every 10 years, seven years you do need to be fair. You need a reason to be passionate about what you're doing next.
Say that seven years to do one project. You know, that's what it takes for development. It can take up to seven years to do one project. You need some reason to refresh, to relearn, to be skill, you know, to understand what's new because you've been so busy, entrenched in what you're doing. So, yeah, I agree
James Dice: [00:09:11] with the complainant.
Absolutely. Well, let's dive into it. So I want to start with my favorite question, which is why is technology adoption and buildings so far behind and in your opinion, and we've had a lot of great answers, but I love the fact that we get something different pretty much every time. So I'm excited about your perspective.
Shen Chiu: [00:09:28] Um, yeah, look, I, think, um, historically, you know, bricks also has always been a very slow moving sort of industry construction. At least it's a slow moving industry. Um, and, and it's probably well recognized in the construction industry is probably one of the slowest. It's it, there's a lot of people involved, a lot of unions involved, and changing things, especially with automation and technology usually implies, um, reducing people to produce, you know, efficiencies and automation.
and so there's a direct correlation to, you know, people's jobs where it's not, they're not incentivized in many ways to do that. It also comes back to the learnings. As technology gets more complicated, as things get more complicated and specialized, you need more training to understand those. So then your, normal person who's been doing it for 20 years, 15 years. It's very difficult for them to skill up. It's easy to say. I want to ask to skill up, but it's sometimes you haven't necessarily come from a background where scaling up is on the radar. What do you do? How do you rescale? How do you find a new job?
Um, so you're not incentivized to use those tools. Your everyone's a creature of habit and you just want to do what you normally do. Uh, in construction property is, quite a slow moving beast historically. and then you've also got people whose business streams are fully invested in a way of doing things.
They're not, uh, they don't want to butcher. You know, take away from their current income stream, even if they believe that the new idea will give them, future earnings. So they don't want to disrupt them schools, they will slowly transition across. Um, and so it it's, no different than hydrogen batteries versus diesel fuel.
Uh, the big players are not incentivized to stop selling diesel until they are. Have a big enough monopoly to equal their monetary stream for hydrogen, unless governments legislate something. Uh, it's, it's a very slow, um, move. So, you know, not a great allistic answer there, but I'd say that there's, I guess too many pieces in the puzzle, it's a very complex space.
Uh, there Polly isn't enough advocates at a decision-making level where, because it's complex, why would a investment director, a development director or an investor want to understand the myriad of esoteric, paces when they just want some simple reasons? Uh, and in many ways, governments, I think is the driver for a lot of the changes because government sets legislative policy and then others will have to follow versus will choose to follow.
So market leaders will always follow, will always do their own thing. And they'll make some wins, but usually it will takes a larger body and that's usually government, or it takes a lot social body to actually push that move as has been done with sustainability and climate change. That is a social mood.
Um, but technology people aren't really seeing the rationale yet. So.
James Dice: [00:12:14] Cool. And I think as we explore Investa, a couple of those themes will pop up for sure. In a minute. Uh, so, so can you explain what is Investa again and, and maybe talk a little bit about your portfolio that you're involved in, in Australia.
Shen Chiu: [00:12:30] So, um, investors original or main mandate for, for, from its formulation was commercial office buildings and owning and managing those buildings as well as developing new buildings to put into the asset pool around. $13 billion with office buildings is our main pool. And if I just talk about that rather than talking about the recent change, where we started looking into build to rent, then I can focus more in, on, um, you know, where our new pipeline develop buildings coming from.
Um, and it's, it's looking at, you know, brownfield sites, um, there's rarely Greenfield sites that we're looking at Greenfield being a brand new site in the suburbs. We're looking generally core CBD areas for high rise office buildings. That's our kind of main focus, of the portfolio. Um, and that allows us, I guess, in those sort of buildings to look at higher end tenants, professional services, tenants lawyers, uh, bankers, et cetera.
and then what are their drivers? What are their needs? So that our office buildings can service that to either attract new tenants, um, and were willing to pay the light, uh, rent to make it a feasible building or retain tenants who are staying in there and looking at potentially moving to another building, but say, well, actually I can't get what you guys are offering us.
Um, so that's kind of the, basis, I guess, a little, the hypothesis of our office building offer to be the best, um, office building provider, in the market. Okay.
James Dice: [00:13:56] And how many buildings do you have? Uh, under management?
Shen Chiu: [00:14:00] Yeah. So it's just Australia years ago. Uh, an ex CEO decided that it wasn't worth us owning buildings overseas because we really didn't understand the market or, you know, the, the, the clientele.
Um, so we sent centralized to Australia in sort of the mid two thousands. Um, and we've got probably about 40 buildings in the portfolio now. Um, I should know the number of square meters, but it keeps changing with new development pipeline. We've got, you know, 3 billion of development pipeline coming out of the ground at the moment.
Uh, which means that the number just keeps on changing.
James Dice: [00:14:33] Cool. Well, I want to talk to you about so you're building your buildings. You have existing buildings as well. So I want to to totally nerd out about your philosophy on new and existing, but let's start with like the overall program.
The, like, what are you guys trying to accomplish from a smart building technology standpoint? And what's the strategy that you've put in place to kind of guide how those new and existing buildings end up happening?
Shen Chiu: [00:15:00] Yeah. So, um, Polly, I'll rewind that a little bit to, when I joined invest about eight years ago, there wasn't really a smart building program.
eight years ago when I joined the business, uh, smart buildings, wasn't even a term that anyone was really using, probably eight years ago. in that time, as we were evolving our strategy to just deliver quality buildings, that tenants would want to use that long-term, our investors would always get a solid return from.
Um, and let's say that buildings last. Around 50 years, because what we were finding was, uh, two of the buildings and that I was immediately given to deliver, uh, were about 50 years old. They were both built in the 1970s, or late sixties. And they were reaching that point where, the form of the building, um, maybe the loud of the columns, the, quality of the glass, even the waterproofing around the facade was just falling apart and it was impossible to, just renovate to get value.
So we were able to look at the buildings and say, okay, it's about 50 years old. Let's knock them down. What can we build? Um, so the strategy then is purely around quality. assets in CBD locations to attract tenants and what are tenants interested in? So we knew that sustainability was a big goal, uh, for tenants, uh, for, our government has mandated a minimum sustainability standard of the building for any of the government tenants and no different than probably where you are.
Government tenants, public sector tenants are the biggest tenants of the market, not private sector tenants. and so everybody is now incentivized to hit a minimum sustainable time. We were, we were finding that there was a drive towards, things like amenities. People are looking at healthier culture, cycling to work, maybe trying to get rid of cars, uh, healthy means going to gyms.
So now what are the amenities in the building or around the building that are relevant? Uh, do you need, uh, retail, food and beverage? Yes. Coffee is huge over here. Everybody has their own personal favorite coffee and they make it themselves. Um, the end of trip or end of journey facilities where you rack the bike, you have a locker, you have almost like a country club style shower facility with towel service.
And the like, um, people were looking at, in the gyms, in the building or, or flexible, not flexible space in the coworking side, but, you know, flexible space that people could have breakout space in, you know, lobby, cafes, and the like, uh, where you would have meetings, a little business centers where people could get away from their desks.
Those were key things. and then in that space, we were starting to hear things around, I guess, specifically property technology that would enable some of those to function better or property technology that was helping you to better run your building and keep the cost of running the buildings and down both for the owners, but also for the tenants, because some of our lease structures mean that we pass through a lot of those communal costs to the tenant.
So, you know, the, again, it's a commercial thing where, um, and not many people talk about it, but if you look at the detail of at least, it explains to you what, actually is driving the tenant's reason to come to you, not just the rent, it's a whole bunch of other things, including, um, how much the building kind of how efficiently the building runs, because that gets charged back to the tenant.
Um, and then we were looking at technologies, like, um, so I've, you know, I've gone through, uh, efficiency, I've gone through some of the tenant engagement, elements, um, and then things that were actually driving. Um, Oh, and the last one was, we were hearing from the UK that they brought all the BIM standards into play.
So they were saying that potentially could this come to Australia where the government mandates that every building needs to have a 3d model. Every new building has to have a 3d model that will actually, have a end to end, Asset list, uh, structured topology and 3d visualization, uh, not just so that your facilities team have access to good lights, uh, documentation, but so that in future there's solid data against every building.
Um, it also improves planning and construction, efficiencies to make sure that there's less wastage on site because what's that phrase, uh, draw twice cut once. Um, and we know that when the builders are building even mechanical pipe work, they assume 10, 15% wastage because they know when they get onsite that they will into plumbing structure, et cetera, which then in the way, um, so they have to assume they're going to have to cut and run flexible pipes to different places.
If you can preplan all of that, you can come to site. Either knowing and installing without worrying about clashes or you can prefabricate modules and then bring us to sites. Prefabrication was one of those big drivers. So we understood all of that was coming. Um, now it's impossible when you're running a development to think of a strategy that involves all those random pieces.
But what you do is you, you start thinking, okay, I've got to keep that in mind at every step of the design process, concept process, the feasibility process I need to allow for the money. I need to make sure the designers are being given a brief to push. Tell us, give us an idea of what's happening in the market.
and then as we get sign-offs at different levels, we've ensured that everyone's brief to say, this is our goal. These are sustainable goals. These are our amenity calls, our design goals, these of our, spatial sort of, you know, goals. And then this is our technology goals. and even then no one was talking about property technology.
no one really acknowledged that building services are your property technology. They just started talking about Patek. Like it was a different bunch of technologies and actually it's just a different term for the same thing that we were doing all the time. Right.
James Dice: [00:20:40] Right. What do you mean by building services in that context?
Shen Chiu: [00:20:44] Um, HVAC launching vertical transport, access control, uh, security, all of the, many subsystems that would run a building. we call them, I guess, building services. Um, but even then I years ago we had, the IOT, we just didn't have it in the way that we have it. Now we didn't have as much, I guess.
Um, well, we still had issues with, uh, I think the police still using the blue cables, the, the, cat cat five cables.
James Dice: [00:21:11] Yeah. So you did those two developments originally. And then how things changed since then? I'm sure they've
Shen Chiu: [00:21:16] changed. Yeah. So, what was interesting about the two developments where they were running about a year apart?
So we had a, uh, we call it an A-grade building. Um, and our grade goes C D D C B a and then premium. And in the cities generally, you only build a grade and premium grade building. So we had an eight grade building running, and, it was a good time to formulate all of these ideas and actually implement, strategies around delivering what we were looking for that best building.
Uh, but through that processes, as consultants, we're bringing to us more of these technologies, we were trying to implement probably the first, virtual 3d model all the way through to five D bin. Um, or even beyond that 60 beam, I think we were talking about back then, um, on the second project, what was great was everything we didn't do, right.
Or everything we were able to use hindsight on, we were able to implement in the second building. The second building was a premium grade building. Double the size of the first building. Um, and so we were able to take all the learnings and that became probably our, what's that word. how landmark building for smart buildings, um, and things have changed massively through that process of delivering those buildings.
Um, We went through design. We started getting consultants in bias. Guess what was happening? We're starting to see value in some of these new technologies around spatial utilization, around, building apps around, um, IEQ. Well, well, rating came out during that period in the, in the mid sort of 2015, 16, and we had to adapt very quickly to a new rating system that was driving health and wellbeing, which we knew was important to our tenants, or was important to tenants to come.
And again, setting up a building over a seven year development window where you're guessing what the next 25 years will look like. Uh, you know, you're lucky to be able to guess what, what you're doing next week, but you know, you're trying to find this, what will the building be like, what am I specifying on day one?
How do I keep a broader, you know, almost umbrella strategy. That means that in five years when the building is developed, even though I've specified. Technology amenities, a design five years before, and it's locked and loaded. And in five years time, I'm not immediately out of date. How do I ensure that?
And so, whereas design, you can, I guess it's well established. The practices of good quality design will stand the test of time. Some of these technologies were so new, that we were trying to not in the first building, we did a number of, I call them point solutions. We specified a number of like a lighting technology.
Um, we were very early days with the mobile credentials on our access control. Um, we put in a number of different, I guess, analytic tools, to look at energy management and the like on our BMS. Um, and we were just guessing we were going directly to vendors. We were finding products.
We thought were worth a go. And then we were putting them into the building. Um, on the second building we realized actually, Hey across a portfolio, that's not scalable. You, you need that. You need to definitely need a strategy that gives you an end to end. Plus, how do I scale that across our portfolio? Um, you need to avoid point solutions.
You need really more of an umbrella strategy that allows you to plug solutions in when you want and pull them out the same issue around why it's difficult. Having a single BMS provider who provides every single other device security and access control, and the like, to then find that when you want to change, you need to change every device.
You can't just change out the BMS. You gotta change every single sensor that they connect to. Um, because they're all talking to each other in an ecosystem. Uh it's I guess it's the Apple versus other, ecosystem sort of question. and so. we, we then started paring back from point solutions and then looking at a much more holistic.
Okay. Let's set up an ecosystem. Let's set up a client based ecosystem that allows us with, with some high-level principles. everybody must be able to plug and play into our ecosystem, which means that our data protocols and ontologies, you know, typologies that need to be agreed. Uh, the, the consultants a better at specify that, but we need to make sure that at least three vendors that can supply to that requirement from the market, then we can go to tender and we can make sure there's always competitive, tender.
There's always competitive product. Those products. We stand still need to make sure that they have some. I guess history you're the last thing you want is something which is a critical system failing because you've got a one year, two year startup, which might have the best system ever, but they go under, who's going to support your ongoing use of that system.
So there's certain critical systems that we, need and we do need, uh, vendors, safety, maturity, uh, you know, tried and tested. And then there are other, um, I guess more interesting, modern cutting edge solutions that might be of value. The other thing that is really different about every country is that in Australia, we do something called a warm shell, fit out where we speculatively fit out the inside of our office buildings with ceilings.
Um, floor by floor services, you know, the loud or the pipe work, um, lighting, et cetera. And we put carpets down, um, in, in America you do a cultural fit out where you stop a lot of those in the core, and then you leave it to the tenant to fit out the ceilings, the floors, et cetera. And the, the interesting difference in that is that, in Australia, we have to think about what the tenant might want in their floor.
So when we're offering them a floor plate, we might think about sensors in the ceiling for movement tracking or for IEQ censoring without knowing their final fit out. And we have to take a punch on that and we have to invest money in that upfront. And so we need to understand what we're putting in, which is why it's even more important that we have, I guess, this umbrella strategy of, You know, building an ecosystem and letting these things plug in.
So if the tenant then says to us, actually, I don't like that. I've got my own visitor management, visitor registration, I've got my own, uh, you know, people tracking utilization or IAQ sensory or the like, or booking system. How do I plug my system into yours? You know, how do I get a credit for that? How do you install it for me before I even come to the building?
Um, whereas in America you can pretty much stop and say, this is my line. And then you, Mr. Tenant, you do everything inside the building, which then drives different solutions because a tenant will go for point solution because they're only doing it for that one tenancy. We are thinking about how do we do it across 40 buildings, you know, in a million square meters or, you know, 10 million square foot of space.
We need to have that broader strategy. Anyway, that was a really mixed answer with no clear,
James Dice: [00:27:57] No, I actually have a couple of questions. So when you, you mentioned how the first building had like primarily had point solutions and you went away from that.
So I want to key in on that, because I think at least from the projects I've worked on and I think the general status of this States, at least, and I'm not going to speak for the rest of the world is that that's kind of the state-of-the-art, uh, is, is, is point solutions everywhere. And that's like a lot of people's definition of smart buildings.
And so, I mean, obviously not listeners of this podcast of course. Um, but, um, but I want to hear from you, like why don't point solutions work from that holistic portfolio perspective?
Shen Chiu: [00:28:39] I think, um, you know, people will use the phrase. A single source of truth and a single lens dashboards where you can see how all your buildings are operating across your whole portfolio, rather than just one building.
And what we found was, every time we engage a vendor directly, they didn't just give us their technology solution. They gave us their own, online cloud portal. and they gave us their dashboard. And if you think about how difficult is, is to set up a startup, if you imagine, you know, you've got these great technical guys, so maybe going to build hardware or software, and then they have to then become designers because they need to build a dashboard that speaks to all clients as if it's everything.
And the same problem we have with a BMS and a, you know, lots of subsystems with their own headends and their own engineering pages is that, We've got all of these disparate systems, which have their own dashboards and their own representation of information. And then every time you go to a brand new vendor, you get a different version of that.
We all want would like it or not. We want windows. Interface. We want icons. We want the Adobe suite. We won the Microsoft suite. That's why these things are so popular because everyone knows them where they go. They get the same thing. And so within a business, even though we met, I'll be able to say that for every different business, within a business, we're going to, to one, our facilities managers, our operational teams, our property managers, our developers, to look at same format, the same layout, the same presentation of information in the same way, uh, because we can make better cognitive decisions.
If we're not spending all our time working on what we don't know, it's all in the same place. It becomes part of our workflow. So point solutions are difficult, not just because they often run with different data protocols and, proprietary, you know, licensing agreements and costs plus their own web server and cloud costs as well as their dashboards.
You know, they're all of those. Uh, disparate and they, they need to come into one system. So what we really want is one ecosystem, one pain, a one view, and yes, you might have to jump out to do the engineering, but in terms of what most of our operators use while it's arguably a alarm respond system, we're going to always want a singular dashboard.
And, you know, I often talk about, when I want information, I need three types of information. I need the information that is at the technical level. Cause the consultants and designers, the builders might need that. I need information at my level where my team as a developer sees it, but we're, one level removed.
We don't want to see all of the detail detail. We want to see a summary of that. And then I need another version. And that's the version for the board and the investors. And they really don't want to see more than one or two items on there. And it's usually cost related or key risk related. Um, you know, and so those different versions means that if I get a dashboard from this vendor and all these disparate systems, I have too much information and someone has to dissect it and someone has to interpret it and someone has to put it all together.
So we went away from point solutions, you know, primarily because we have a portfolio. And once you have a portfolio, you need to think about the bigger picture of, of new buildings, consistency of approach for all of those buildings and consistently of approach down to every existing building because 95% of our portfolio is existing buildings.
And, and you're going to need consistency across those leads to a whole new conversation around the fact that every single one of our buildings has a different BMS anyway, and, and has exactly that problem. But at least as a strategy, that is the light, that is a better strategy and the right approach for growth and for sustainability than it is to have a whole bunch of point solutions.
Totally. I love
James Dice: [00:32:22] that. And anyone who's taking my course right now is probably smiling, listening to you say that we have a whole video that, and I'll put the slide in the show notes. Um, but you basically just described perfectly as that's why I was you. You can see me smiling, but everyone else probably can.
yeah, that's kind of the state of a lot of different portfolios right now. So, cool. So you mentioned the board and kind of boiling things up for them. I wanted to ask from a program perspectives. What's the business case here for this smart building program within, within investor for, for new and existing?
Shen Chiu: [00:32:57] Um, yeah, so like, I'd love to be able to say even now often ideas sort of delivery process for, for two of our, you know, kind of key buildings, um, with a lot of technology that we had a very clear ROI on all of our. Returns based on the investment, we've made a bit technologies. Some of those, we were lucky in tendering to the market.
We were able to get. Um, the, the market to actually not price in any more costs, because some of it was just good practice to say some of the, creation of, um, ontologies and typologies and actually tracking data, pulling together into, you know, asset models, pulling it together. It's a three-dimensional model.
Something that didn't, it doesn't cost you any more money because that is good practice and it helps, uh, the builder. Um, but in terms of ROI, we've always struggled. We are only now one or two years into live operational buildings, pulling together all of the different use cases that prove up that, those value in the technology that we put together.
Um, we don't have. Hey, simple metric that says, if you do X, you will get a 25% saving on Y thus, there is a return of this dollars. Uh, we, we don't have that simple ROI. what we, what we're finding though, is anecdotally, as interviews I've had with facilities managers, uh, with property managers, with builders, with vendors that they are saying, when we plug in a analytics program, it is easier to access your data and it will cost you less than it would.
If you gave us a traditional building where the BMS points are done by one supplier, there's another supplier running, you know, your lift points, you'll your Hatrack points will access control points, and your security they're assigned. That is cheaper. We can reduce the cost by. You know, initially let's say 25% off the top and then slowly even better.
Um, because, they can access the information more easily. We are having engagement discussions with tenants where they are saying, look, this is great. This app that you've given us, it gives us control of our lockers parking access, you know, straight to our door, plus all the community information.
means driven. COVID we were able to keep engagement with staff at home, through your app because they were already using it. Um, obviously we using our analytics, against use of the app, uh, number of sign-ins against the number of access cards that have actually been given to people in the building.
Um, and some of that information comes back from office managers, for tenants, from tenants directly writing in about different events, different functions, uh, different use cases that they've actually enjoyed. And so we're collecting all of that in a, in just a big repository of, you know, wins. and. What we could do better.
so I think this is an intuitive process. Um, going up to the board, one of the things which is difficult for existing buildings and possibly easier for new developments is high investment in technologies. And where we've gone is these use cases tell us where the real value is sitting, uh, the alignment of data, the, the savings and outgoing, for lease and for tenants, the, the, the improvement in the, the day job or workflow or responsiveness of our operations teams for problems that occur, uh, our ability to almost be more proactive in.
Identifying a problem before it turns into a failure or a fault, or a problem that's going to happen, uh, tuning the building, those sorts of cases, those use cases are being pulled out, understanding the alignment of access control data with lift data, with, you know, HVAC data is a good one to give us a bit more insight into people in the building and how the building is operating to deal with people when they're in the building.
Um, and now how all out is, is taking those steps into existing buildings, because we know it's hard to invest, uh, large sums of money in existing cap programs, uh, investors and the board rarely give approval for significant sums of money until something is broken. so, having those use cases shows that it's worth in fact, investing in keeping those buildings as.
As close to what tenants want as possible by introducing. And in our case, mobile credentials on exits control is going to be a big one going forward. Um, having the ability to have, a across portfolio building up, but no matter what building you go to within our portfolio, given that a lot of our tenants are in multiple buildings in different States, they can just walk into another building, have the same app activate and get access control.
You can't do that unless you have a ubiquitous system across all of those buildings, you can't have a whole bunch of different access control points. Uh, cause that's why we all end up with, uh, those whites, access cards. I mean with five. So every S as a national development director, I traveled between three or four States regularly, or I did before COVID, uh, I have four or five of those cards sitting in my bag and I just have to, I've lied on them and building, and then I go and I tack them in each building to get in.
Now that's just not that we can do better. And that's one of the things we know we want to do better. So that's one of the items and then having, I guess, open protocols and a, central network, uh, you know, an integrated network comms network across the whole building. So that irrespective of PLA we want to plug and play.
I mean, that's a great term that I guess Microsoft came up with years ago that plug and play concept. So BMS provider is no longer meeting their KPIs on, or maybe it's out of date or we want to update it. We can plug them out. Pull them out and then we can plug someone else in that's what we need. And the only way to do that is that an integrated communications network across and, and then clear standards around, you know, protocols, data protocols, and what people can access and what they can't, who owns the data and then having a data Lake.
Yeah. Hopefully not a data swamp strategy where you actually pull that data in a sequenced way. Um, I still think we should have structured data. I hear the AI and ML guys saying you don't need structured data on instructors. Fine. Cause we can get into it. It's like filing your emails. It's still easier if you structure it and think about structuring it than just, just throwing everything in one place and hoping you can search for it later on.
James Dice: [00:39:01] Yeah, totally. I agree. Um, So it sounds like the business case is different for new versus existing, which makes total sense. On the new side, it's kind of fighting with the incumbents around, not fighting, that's the wrong word, but fighting with the accumbens on getting it down to what it would be without the technology.
Um, and then even if it costs more, it sounds like you're making the decision that this is what are our tenants want. This is what our clients
Shen Chiu: [00:39:25] want. Yeah. And that's always the case. Yeah, absolutely. That's always the case with majority of our, um, I guess drivers like sustainability amenities and design, et cetera.
You can only guess what the market is going to pay you back for. You take your most educated guests. You sound out the market, you talk to your tenants, you get feedback, you'd watch what's going on with trends and topics. Um, but these are all still guesses. There's no hard metric around most of these, benefits or tenant and prop technology is, is no different than that.
It's probably about, we think there's good. Three to 5% in a truly integrated technology stack in a new building of construction costs. You will probably add three to 5% if you, if you want to do a really integrated technology stack, but that's, you know, that's doing everything. You can pare that back to the, the, the, the ICMs, which are now, you know, probably ubiquitous, everybody's delivering an ICN and the new buildings.
Um, and then it's about putting together the Y sort of, I guess, performance requirements around, Data standards and the log. Okay.
James Dice: [00:40:27] How about on the existing buildings? How do you think about you have like your you've defined out your standards of your smart building program, and then you have what you say, 38 existing buildings that have like varying degrees of disarray I'm sure.
From
Shen Chiu: [00:40:41] that perspective. Yeah. Yeah. We, well, it's a slimmer, mover. Most of those buildings are just making sure that they're, they have a good EMS, um, energy management system and make sure that they've got an analytics provider. we've now got a national, provider, um, actually doing analytics across all of our buildings, helping to optimize, helping to look for, you know, fault detection and et cetera, as well as, you know, analytics for optimization and tuning the building to run more efficiently.
We have a national provider for that, and that is allowing the buildings to at least. Be as effective and efficient with the equipment and devices they have. Uh, and then we've got a parallel program that's running to making sure everything could rebuilding has got a, you know, a, an integrated comms network setting itself up for the future.
Um, and then our other strategy, you know, in tears of importance is then making sure that those buildings have certain minimum, data, drags, which are possible. One of them is from the BMS that we need to get, to pull all the data and whatever data is available, whatever data we've got within our, I guess our BMS, the licensing agreement to pull and input put into our data Lake.
And the last part is, we believe there's a heavy alignment of the people movement and people usage of the building. So access control through both doors, as well as lifts. Is where we're getting the, the other alignment of information, uh, short of putting maybe people counters, which again can be difficult because it shows you people in the lobby, but not necessarily people going up to their floor, whereas lifts do.
And we have in Australia, we pretty much all have destination control lists, which means that everybody who goes to a floor will click a button. Uh, no one will realistically go stand behind someone else and go, Oh, you're already going to level seven. I'll get in the lift with you. Cause they won't know they're going to level seven because it will just be less safe and they'll go, Oh, where's Lucy going?
I have no idea. So they have to press a button. So the, the, the, the collection of the data of a pressing the button. The floor that that person is going to gives us good insight into the people moving into tendencies within that tendency, we can then get the data of the performance of systems within that floor in terms of energy usage, lighting, HVAC, et cetera.
And then we can align that to how do we optimize the space for that tenant based on usage? Um, so we're, we're, we're finding that sort of, I call it access control is one of the key pieces that talking to the lift guys, and, uh, and, and then making sure that we have the ability to access the data from the BMS.
And that's our kind of core strategy on existing buildings at the mug. Totally.
James Dice: [00:43:17] And, uh, and one of our listeners, Joe is gonna kill me if I don't ask you this, how do you fund that for an existing building when you have, an existing investment, right? That, you know, there's certain expectations around operating costs and capital costs, for your investors.
Shen Chiu: [00:43:33] Um, I don't know, a lot of business cases and really carefully. Um, part of it is, is an education led. Let's say that the, the, board, the investors they're, they're not experts in this space and they're not meant to be, they are reliant on us as experts and us as a building owners and managers, to advise them of where things are going to make, uh, is going to find, we're going to find the Delta, where are we going to find the difference and going to help them?
Um, and traditionally you might say, well, until you prove up an ROI, I'm not going to spend any money that might work for privates, privates, who the money is coming out of their own pocket. But in, in, you know, institutional investors are a little bit more broader in, in their, their, their recognition of, you know, trends and topics that will actually make a difference to them.
So, um, they, they're not. There to squeeze every dollar. There is always a CapEx program that has to be, they're usually based on maintenance, usually based on longevity of equipment. And our CapEx program is usually set up for building, um, and, and runs for, you know, 10, 20 years. And you're constantly chipping away at that, uh, tenant demands, tenant vacancies, as tendons leave.
Sometimes you need to reposition the building, you need to do something new. Um, so all of those come into the piece for the business case, that talks about how the building's performing, how it's performing against its peers, or even the rest of the portfolio. Um, do we need to do better? And then why do we need to do better in what areas do we need to better?
Uh, and then that becomes a little bit more, uh, qual qualitative around trends and topics, feedback from, uh, agents feedback from other tenants survey information, and, I guess, successes in other buildings that we've had, and then saying slow education about why some of these technologies are valuable.
James Dice: [00:45:11] Absolutely. Very cool.
Hey guys, just another quick note from our sponsor nexus labs. And then we'll get back to the show. This episode is brought to you by nexus foundations, our introductory course on the smart buildings industry. If you're new to the industry, this course is for you. If you're an industry vet, but want to understand how technology is changing things.
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I want to circle back to the buildings are developing and just a second, but on the existing Golding set, only the last question I had was how, how do you guys just think about engaging the operations teams? You mentioned analytics. So one of the biggest things for me is if I'm a, if I'm running a building, right, and you you've mentioned all these different software systems, I have to log into that.
Tell me there's so many different tools, so many different things going on. How do you get them to engage in an analytics program? Um, and how have you kind of thought about rolling that out and getting stuff to actually get fixed?
Shen Chiu: [00:46:25] So, so, yeah, I, I, I think, uh, the first time as a, as mountain analogy, uh, the first time we moved offices, you know, in our business, we hired a full-time change manager.
And I remember saying, well, what do we need to change Bennett for? We were moving from an office where we've got desks and we've got computers to another office with desks and computers. Why do we need a change manager? And they sent me on a course. They said, obviously you need some edification, Jen. Um, because.
People. Um, there are three types of people. There are people who embrace the change. Uh, they love the change. They see the positives, the half glass full of all of the, you know, cleanliness, new, shiny, whatever new location, et cetera. And they will embrace that change they're advocates. So you don't need to convince them.
You just need to keep them informed of the journey. And then you got the people in the, uh, in the other spectrum fully to the other side who are always going to be negative and they'll never support. Whatever you do, because I don't like change. I don't want any, they don't want that. You can only keep them informed, but it's very hard to pull them into the mix.
And then you all the people in the middle and these people in the middle could either fall into the negative temp or fall into the positive camp. And it's how you engage with them. Uh, which will really make the difference. And that's the 70 percentile sitting in the middle. And so change management, uh, requires you to, um, engage those people as heavily as you can.
with information that's relevant to them with a briefing, with, relevance of, You know, their day to day and how that affects them and the positives of that. Um, you get them involved in making decisions that actually affect the, they themselves tell you the spec or the brief of the final. And this was just to change offices from one location to another, with, you know, uh, different types of deaths.
I mean, we went from, uh, these kind of jelly beans, shaped three people, module desks into these flat desks and, you know, sit, stand desks and stuff. And I was like, well, surely that's a good thing. Why do I have to train anybody? And they're like, well, because some people will go, well, that's too difficult. I don't want to press this button then, you know, why is the desk always changing and why am I going to a desk?
Which is not always mine permanently. There's a lot of, you know, I guess getting used to that. So it's a change management process. And that was, um, you know, before we even moved buildings, we had a year of that. Even letting people select the type of chairs that they might move into. So we go well that into, facilities management.
And you say, you've got people who are now, you know, have literally been doing what they've been doing potentially for 20 years. Um, are they in that. Yeah, negative camp. Are they in the positive camp? Is it the young people in the positive camp? Is it hard to recruit young facilities managers because it's, you know, a job which traditionally was something that evolved from someone who was probably working on the building as a contractor, almost into a role where they became the most knowledgeable person, because they were fixing constantly fixing all these different bits of equipment to now this kind of traditional thing that we understand as facility manager, or are they white collar educated people who've come out with degrees in mechanical engineering or controls or low electrical, electrical engineering, which means that they actually see a real future in, I guess, machine learning, using cognitive thinking and making decisions that actually inform, you know, much bigger changes using this software.
So all of that has to come into the piece. All we can do is assessing our team and we've got a mixed breath of all of those people, uh, is that we engage them early on with what we're specifying and why we make sure that what we're doing They've had at least constant eye over and made sure that what we're offering them as a tool is something that they see value of.
And even if we're going to go do it anyway, we make sure that they're part of that process of the implementation. And so they can at least add little bits of where the relevance is. Um, and then we've done a lot of training posts a year before handover of the building where we, where there's a lot of handover training of using the equipment, playing with it.
You can't break it, just play with it. You can't break it, just play with it, um, all the way through into now you're using it. Um, have you tried using that tool, you know, have you constantly checking in, are you using that tool for that? Or what are you doing differently? Are you using the old tool? Are you using the old way where you look for a CD with a copy of the file?
Are there there's my information or have you used a tool to do it? If you've got a problem. Did you check whether that particular device had flagged a problem, maybe in a part of the dashboard that isn't apparent, ah, do we need to bring that to the front of the dashboard or do you need to check more things?
Does your workflow need to change? And that's a really, it's just a slow person is an education, um, engagement. Some people don't like it. Some people will leave the business. Some people will feel threatened. Um, there is no, even with our smartest building, in terms of, technology enablement, um, we didn't lose any staff.
We didn't replace any staff because of it. Uh, I think that in many ways have shown a lot of the, the, the FMS that it's about them getting the best and making their life easier. Not about replacing them maybe in many years to come, there'll be this, ability to have less people do more. Um, but we're definitely not there yet.
Um, and we definitely have a lot of team members who are super important in managing our buildings, operating our buildings and never get thanked. They're the ones who get blamed if things don't work, but never get thanked when things go well. Um, they're the ones that were just spending more time now, especially at the backend of projects to engage with.
And then I guess the new developments have given us the benefit of seeing that engagement with the same team members, um, seeing their use cases and then bringing that back into existing buildings. So they can be the advocates to their own peers in other buildings rather than, you know. Well, what does the development guy know about running a building?
You know, the only reason I know so much about running a building is because. I've gone into the, the, the, the nuts and bolts and spent time with the guys, walking through plant Williams, understanding their issues both early days and all the way through to now. And you know, that's really important with that change management piece is empathy.
Everyone's got it. Everyone's got a tough job. Absolutely.
James Dice: [00:52:20] How have you guys looked at, or have you done or set up with analytics across that many sites? A centralized operation
Shen Chiu: [00:52:27] center? Yeah, we're pulling that together now. Um, so, that will require a number of buildings to, Go online with a live data streaming to a certain place.
And then we'll get to, I guess, select what that dashboard might look like. I think there were a number of providers, um, who are offering that I think Willow, that you know of is one of those who who's offering, um, almost a portfolio based dashboard, for multiple buildings. And we're definitely considering that, as well as others to ensure that we've got what we want, are they able to manipulate it and change it?
So that presents the information we need, uh, or is it sort of, you know, a static dashboard, um, are the other providers who are able to do that and are they able to get the data. Or do they need us to have already housed the data and then they pull it from a central place. So there's a few questions there, but we don't have a centralized, you know, it'd be lovely to have that sort of mission control and NASA center where everything pulls into one.
Um, but we don't have that. That'd be pretty cool. Actually, I look forward to that day with all those screenings and all the information and Ben had just walk the board members through and everyone goes, Oh, look how run. There's no red lines. There's no red dots. Everything's perfect. I saw that. I saw that.
at Microsoft. uh, rock, they call it the, the real estate operation center at Seattle. so that's, um, even Microsoft took us into their CCC, their command and control center for all of the, as a cloud stuff and that huge NASA style window of information.
Um, you know, just amazing, but, you know, we're, we're, wearing away from that, and there's a lot of money invested in best mental required to get to that point. Probably more importantly, as long as we have a consistent dashboard for each of the operators in their building, that would be our step one.
Before we brought it into a central place where we can run it all in, we see is at the moment when people have a problem, it's usually a technical problem and you needed someone on site. Do we want to wait for, uh, centralized body to drive out there? maybe that's fine if your Microsoft campus and everybody's in one place, you can just drive to the building and you'll get to go.
Uh, but not so easy if it's in a different city. Um, you know, we're just definitely not there yet. Totally.
James Dice: [00:54:38] Um, let's circle back on to two new buildings. So teaching this course right now that I told you about before we hit record, and I'm getting so many questions , um, around new buildings, asking about how, you know, there's a kind of this movement towards division 25 and there being a master systems integrator, um, at least in the U S and having someone be responsible for bridging all of the silos technology silos for a new building.
And what I've been asking, getting a lot of questions around is, okay, well, what if that role is not in place? What if it doesn't have teeth? What if the owner doesn't understand it? What if the developer isn't like taking certain responsibilities here and there? And what I'm getting at is like, yes, we might have that spec, but is it well written?
Is it mature enough? Is everyone buying into that role? Um, and so I wanted to ask you, like, after you built these buildings, Or like the keys to building a smart building, I guess. Uh, and what have you learned?
very rambling
Shen Chiu: [00:55:41] question. No, that's a, that's a, that's a great question, James, in this of different threads of that. Um, so in terms of say a community, there's an argument to say that we need a bunch of standards, maybe a half a dozen standards that everybody does. Um, and that might be about OpenData protocols that might be around, um, integrated networks.
It might be around, Data that that is then stored somewhere. Um, and everyone agrees that, you know, when we go and produce a new building, that's what we all should do. But the reality is everybody's looking for either their edge or every advisor is trying to make sure that they have a smart building advisor needs to make money somewhere.
And if that is a standard document, that everyone just model off the shelf as if it's a template, then there's, there's a lot of people who aren't going to get it. Yeah, the nuances of what they want. Um, and maybe we'll always get no answers, but you know, competitive advantage people will hold back some of the information.
So, so as much as I'd like to think that community will come together. And I think it does at a technical level, but at an investment level, majority of my peers, you know, don't really sit there and dive into the detail of smart buildings beyond a couple of broad statements. Like I was thinking, if you would ask me the question, what do you define as a smart building?
I'd say your time. So I don't, I don't have a single one-liner 25 words or less elevator pitch about what a smart building is. What I do have is I say, every building is going to be different. And what value are you trying to get out of it, then I'll tell you what the smart building looks like. I can't tell you what it is.
I don't know. It's is it, is it to do with tenants and engagement? Is it to do with, um, Investment metrics to do with sustainability is it to do with, so there's all of that, but I, I don't really want to come up with a nice little one line of a one star building is, um, I want to say what's the value for that, that business, uh, in terms of what I've learned.
I guess you need a champion at the developer investor side. Someone is making decisions which costs money, and someone has to be able to find that money. Every time you make one of these decisions, it is different. It's changes, something that costs something. If you don't have a champion from the client side who actually takes ownership of that decision-making process understands enough about the question you asking, you know, um, you will, you will generally fail because a client, a consultant, or an advisor who is, or a vendor.
Is only going to do what they know or think is the question. If you're a vendor or consultant, I would encourage you. If you don't have a client who is, I guess, informed is to keep asking that question every time you're about to do something, ask the client, is this valuable? This is why we think it's valuable.
Is there anyone in your business we need to talk to who may agree or disagree with the value of this is in an operations person. Isn't a property person. Is it an investment person? Is, you know, someone in leasing, if you don't have a client who is the arbiter of all of that information, you need to ask that question.
You need to keep asking that question. You need to be proactive. You can't just wheel out the last version of what worked and slap it onto the next client. And that is the biggest. That is the, the, as, as an ex consultant, the best consultants are the ones who actually proactively ask the client. Questions to ensure that they're giving the value that the client needs.
Even if the client doesn't know they needed it. Um, and you will, you will probably find for many years you won't have these champions. Well, what I am finding is that the community is now made up of a lot of smart building, um, smart building leaders in a business. They're usually a team of one or two.
Yeah. Yeah. So as a, as a team of one or two, they just don't, um, they don't have the bandwidth to work across everything to, to come up with everything. So that's still good, but per project, you need a champion. The client usually needs to allocate a champion, whether it's a development person, whether it's a project manager or someone that champion need to know a little enough, enough to be dangerous, but not enough to be, you know, to make really bad decisions.
And then they can guide and curate and facilitate the discussion. But that champion needs to be there. And if you can't get it from the client team, then you have to hire it. Hm, you need an advisor. Who's that champion all the way through. And they need to sit all the way through to construction operation at handover.
If they stop off at any one of those points, the person who had the vision and worked with the client with the vision, doesn't have that all the way through to the other side. Um, and, and that, that becomes a problem in itself.
James Dice: [01:00:18] Totally. I love that answer. I totally agree. So that smart building. Champion doesn't need to be like the most technical expert on every silo, every building system, every technology. Right.
Shen Chiu: [01:00:34] So how,
James Dice: [01:00:35] how do you, play that role, I guess, and still enforce things like, just maybe use a data model as an example at the end of the building, you want a common data model across all of the different devices you've, you've mentioned in different software systems.
Right. So what's your strategy for sort of making sure at the end that that data models there, when the champion doesn't necessarily need to understand ontologies, right? Mm mm,
if we need the champion to understand ontologies, then we have, uh, uh, inherent lack of scalability and just the, the whole smart building
Shen Chiu: [01:01:09] concept.
Yeah, it's um, again, I guess the UI, the champion needs to just know enough to ask the why questions and facilitate the, the, the team, like a, like a conductor. They're not they're playing the strings or, or, or playing any of the instruments. They are actually just conducting all of that. So they need to have an overview.
Um, there is always going to be a place for, um, probably a smart building advisor, no differently than we have an ESD, uh, advisor who actually runs a ruler over, sustainability questions during design all the way through to certifications at the back end. And arguably that's what you're looking for is a self audit certification by that smart building advisor.
Of what you've produced. So once you started with what your roadmap was, what your goals were, and then they need to check that that's what actually is delivered that needs to be written into the procurement of the builder. And that needs to be written into the builders of its sub-contractors because remembering that builders, that build the HVAC system, that's done by sub-contract to installs HVAC system and that HVAC person with the controls person, with all these other people, someone needs to audit what they're doing.
Um, ideally the best way is to do it via, Technology. So in one of our implementations, um, the tool we, the, the company we use and the tool that they used had a way of checking that all the data was entered in, in the right fields, in the right format. It wasn't flawless because we had a few, uh, sub-contractors game, the system, they worked out how you could put in random zeroes and A's, and B's, and you could self populate and you can just upload the same PDF every time.
And it wouldn't, no, the computer would just go, it's assuming consumed, you'd put them on information in the right place. Um, but let's, let's let, that was it. That was more the exception rather than the rule. Um, you need an audit trail at the end, so, you know, I'm never going to look at. 10,000 points, let alone a hundred thousand points of data that makes sure that someone's put in the line information in my place.
so, so you do need some sort of system that can do that for you, not a person. Uh, and then on the other side of, the specifications and the light level and quality, we are aligned on these communities building, these, these specifications. So when we were using our Toby schema, haystack was still on its name and license.
Um, and then brick came along, brick wasn't even around when we started it. Now we've got the, the digital twin data language, TDL staff, that, that again is creating different typologies and ontologies and the way this stuff is structured, but I wouldn't even know the definition of ontology if you hadn't written it on one of your posts.
Um, but, you're right. I don't. Want to know about that. I just want to know that the information we get will do the workflow or the insight that we want, and then I'm leaving it to the experts or consultants, et cetera, to create, or use those templates to then engage with a performance specifications, to get procurement done in the way we want.
And then someone has to order them. And that's why I still think it's the champion. They need to pull the right people in. You've got to do a peer review, um, no differently than I guess, tuning your building. You know, the, the, most interesting thing for someone like me to see at the end of a job is that everything that was intended to be designed and was handed over often when tuned, it's not tuned.
You know, the builder doesn't have time. He doesn't even have the people in the building to be able to tune it. So that new year after the two years after the winter, building's been tuned and final, tuning slash conditioning is done. you know, an optimization is done. That's, there's, there's a couple of years post pacing.
Um, and so, you know, that's why you still need that champion to be around, to make sure that the right information is being used the way it was intended, um, et cetera. So finding that white champion, um, and maybe it is a consultant because it needs to have a level of knowledge, as well as the person has another level of knowledge.
Yeah. And
James Dice: [01:05:04] that's, that's certainly everything. You've just said the two different types of champions essentially, right. Internal that has access to decision-making power and
Shen Chiu: [01:05:12] fundings, and then it would be more the sponsor. Yeah.
James Dice: [01:05:16] Yeah, yeah. But there there's two levels there. I think that I've been sort of preaching about in my course that, um, I've seen so many projects kind of die on the vine without one of those two roles.
Um, because the old ways of our industry kind of creep in, unless those two people were there to kind of, uh,
Shen Chiu: [01:05:35] root things out. Yeah. It's, it's all, it's tapped out, nudge, nudge. and just keep, keep it on track. Otherwise it just goes off on one direction and you know, someone, who has an idea just goes off and does what they want rather than necessarily what the client needs.
Yeah, totally.
James Dice: [01:05:49] Let's talk about IB index. Are you ready?
Shen Chiu: [01:05:52] Yeah. Yeah, sure. What is, um, so, so the, the IB index is sort of, I guess, idea was formulated back in probably around 2017. Um, it, it came out of a few different streams and, uh, from, from my side is as, as a co-founder of the IB or the international intelligent buildings organization was really to, to find, I guess, a better way of documenting all of the decisions because we needed to make around choosing, um, the smart building technologies or producing a smart building.
We started calling it intelligent buildings because smart had its own connotations. Uh, smart was almost synonymous with shiny and new. Rather than, you know, value, proven value. and, um, in my, in my side, I, started, you know, as you can imagine, coming through the space and being queried about, on what technologies to use, I just had a huge hit list of new technologies.
I tried to line it up with who was providing that technology. Was there always three providers. And what was I trying to solve with that technology? Was I trying to do, uh, increase value for the building, uh, smooth tenant engagement through a tenant attraction? Was it a sustainable goal that I was trying to tick?
Uh, was it, Security was it health benefits and the like, uh, and then I was also trying to marry up this kind of huge list of technologies with, uh, the maturity of the player in the market, because, uh, am I looking at something that will disappear and won't even be relevant in five years? Or am I talking about a critical system, where say, an IOT sensor on, on a chiller now, the chiller still has to work irrespective of whether I'm collecting all that data.
Chill is still has to work. Otherwise I have no air conditioning in my building. so I haven't the live version of this list. And as I guess my thinking evolved and I started working with, uh, one of the universities here, university of technology of Sydney. Um, they will also doing some, thinking around smart buildings, strategies.
They had done a lot of work around digital twins and how that evolved in the industrial market into, you know, our market. And we came together when we pulled together a, um, and we got some funding to pull together. Um, the IB index, intelligent buildings index, you know, it's been thrown out there as you know, is it a set of education is an open standard.
Uh, you know, is what isn't, but ultimately it's broken into, three pillars of what we think really constitutes come up with a smart building, and a smart building strategy. The first part is related to project lifecycle. Um, and it's all about project delivery, writing the white specs, having the wide road map, blueprint, process map, um, decisions around data, data typologies and the like data structures.
Um, the second part is around the devices and the equipment and, and what they're trying to achieve. Lighting HVAC, uh, waste, water, um, security, et cetera. And then the last part is we call it controls, monitoring and management, arguably one of the most, because all of that information, all of the equipment in isolation and we've talked about before just now, uh, is, is useless unless you can actually draw from it insights and in many ways, It's not just about point solution insights.
It's about integrated insights across all of these, uh, all of these different devices. And so we broke it into those three outcome pillars, uh, input pillars, sorry. And then on the outcomes rather than a binary. Yes, no. Do you have it or don't you have it? We've actually graded that into 15, um, sub categories of benefits to, financial benefits, to, um, environmental and benefits to social behavior, which is the triple bottom line.
And then we graded into good, better or best. So rather than giving it a very binary, uh, this is worth one point. If your habit is worth zero points, if you'd done it, uh, we actually feel that there are different levels of technology enablement. Um, you know, let's say for a light switch, do you have a light switch turned on and off?
Well, that's a zero in terms of smart buildings, but do you have something with an extinction, sensor that actually all extension switch that turns off after a certain time, do you have something with a sensor that turns off if there's no one in it after a certain time? And then do you have that in terms of, um, also includes daylight harvesting so that it's picking up external sunlight?
So then if you had a daytime, uh, even if you want the lights on, you may not need it at the same intensity. All of those will have benefits around cost efficiency, operational costs, but we'll also have sustainability benefits, health benefits, etc. Um, by grading that good, better, or best across those 15 triple bottom line subsets, we can get a lot of granularity across 200.
Questions now that we have, we have 200 capabilities across the product delivery across the device list or instrumentation devices, applications, and then across the controls monitoring management, and then the user of the tool would literally respond to those questions as to how they perform or, or their intended performance.
If it's a decision-making tool at the front end of the job, and then it would give them, uh, their, their performance gains that theoretical maximum. If you wanted to put the full tech stack in as well as a performance, or you could look at it in terms of, I actually want to do better in how I engage with, um, uh, my attendance more, I want to do better in terms of healthiness of the building.
Well, I want to do better in terms of sustainability outcomes for, uh, use of renewables or self-generation of energy or the like, and then you can filter the information back to work out where you've performed in the relevant categories, and then you can increase those that thus building your roadmap.
By the time you finished it, the first time you've now basically built a roadmap of what you want to produce and what value you're going to get at the end. Um, and then you can always use it as an auditing tool at the end to make sure that's what you've implemented. Or if you haven't, you can delete items where you have maybe procured it poorly.
The builder's not going to install it, or maybe the costs went there later on. Um, and then you can go back and then reorder it, the tool. Um, we, we feel that this is going to be just a really complimentary tool to smart building advisors, to consultants who actually talk about this. And in many ways, if you've got a, a team who can actually just populate it themselves, they can actually work out the decisions they want to make at the start of any project, whether it's a new build or whether it's a CapEx spend on existing buildings.
And that's basically the outline of the IB index. you know, there's, there's, there are other tools out there where others are building it. Uh, but the majority of those are very heuristic about trying to get you a gold or platinum rating. Um, Which is great as a benchmarking tool. You want to know how you stack up against other buildings, but the non roof integrated decisions across.
And like I said, the reason I don't define smart buildings as one lovely term, is it, it is different for every building and it's different for every owner. Um, and it's, never going to be comparable your building to another building. There is granularity that you need to get into. So, you know, my gold is going to look completely different than your gold and, a heuristic simplification of that.
Is great. If you don't want to understand the information, but I think the majority of people playing in the space need to make, because there's too many costs, it's not as simple as the sustainability question with a few costs. There are significant costs that could go in and then you'll get no value out of it.
At the end, you put all this technology in and no one will use it. Um, so the IB index is there to help. and we're just working through that. we had pre-funding from a number of startups. uh, Microsoft helped us significantly with funding. the kickoff of the main program. We did a lot of work on, on, on their campus.
Um, working with them Willow, my company that I worked for Investa, um, and then the universities as well. and we're started just trying to get to the point where we've got a tool that we can just let people play with. and then, and then kind of go from there. Cool. So
James Dice: [01:13:47] it's still in development then when can go use it.
Right now, even exactly
a
Shen Chiu: [01:13:52] spreadsheet. Yeah. So it is actually that it's in a very detailed spreadsheet. We'd love because pivot tables and filters at the moment. It's, it's a database of information that's been populated. Um, um, and, and lots of meta-tags. And you can say, uh, in the background to allow you to filter the information to different needs, whether it's a property manager or vendor or a facilities manager.
but at the moment, it's not something that we released out, we're trying to build up. Um, we're trying to build the application tool so that people can start playing with it and really see the value of it. Um, we've got a couple of proof of concepts with a couple of owners. who've engaged us to come on board and actually trial it on their building.
It's all, most of those are, you know, confidential. uh, but they're, they're interested in seeing whether they. Arguably performed as well as they were intending. Um, and then is this something that they will continue to use as their own internal benchmark against standards for their next development or the next capital works upgrade, or even whether they're buying a building and whether what's been salted is all value and will stack up in future valuation terms or, or, you know, uh, investment sort of value of the actual assets.
James Dice: [01:15:08] It sounds really unique because it's not like I mean, I grew up in the lead world where you could kind of install a bike rack and game the system a little bit.
Shen Chiu: [01:15:17] So it seems to print than that bike racks. I got it. Now you see, you mentioned backpacks.
I wasn't sure where you're going with that, but yeah.
James Dice: [01:15:23] Yeah, well, that's like the fame thing. It's like a infamous thing. Intimacy is a better word where the developer needs to get one more point. So then I would just like, Oh, spend $750 and throw in a, bike rack. No one's gonna use, um, anyway, uh, no disrespect to lead.
I lovely. But it sounds like a different approach. It also sounds like a different approach than you described it a little bit. I've looked at all of the rating systems out there and there's kind of a premise that's basically like there is one definition and what you're saying is it depends on the use cases that you're trying to enable and you can judge against those use cases, um, based on what you're trying to
Shen Chiu: [01:16:02] accomplish.
Yeah. You, you need to be able to, you know, you said it better than me, James. I should get you to survive the copy for it, but, um, that's exactly what the difference is. If you believe that there is an answer to the ultimate, um, Uber tech stack smart building. And you always compare yourself to that. Well, you're going to be out of date before you even deliver the building because it takes years to deliver a building.
And that keeps on moving. What you want to do is measure yourself against what you aiming to, to, to achieve, and. a more holistic idea of the value. Um, and then you want to constantly challenge yourself to make smaller upgrades. you know, if someone were to ask me some of the core elements, I think I've already told you that an integrated network, some sort of, you know, open data protocol, those are the kind of the core things, but I can say those, and then they're nice and sort of high level, and then someone has to go and solve it.
But in terms of implementing actual technologies at that granular level, you need to be able to check constantly whether they are valuable. What's the next valuable thing? How am I going to upgrade the building? Where am I going to deliver the best bang for my buck? And it is always money driven, even if, um, when doing lead.
And we do a lot of Greenstar here, even if we greenwash it, to find the cheapest way of getting to that point, you know, um, there's an argument to say, as long as you're doing it, it's good. you'll bike rack, single bike rack doesn't sound right, but, uh, let's decide better than not having a bypass. but, uh, yeah, we, we definitely want to steer away from a singular value chain because every owner is going to have a different value chain and it's always going to cost money.
So if finance isn't one of the value chains that you actually consider, how are you supposed to get this across the line? You know, how are you supposed to convince the board or the investors to spend money? Why is it so difficult to get some of the existing buildings to upgrade to sustainable standards?
Because there's a, there's an existing, uh, income stream and no one's going to spend that money because there is no, you know, Oh, we'll get better tenants and we need to upgrade this unless you have a portfolio strategy, someone's actually monetarily incentivizing you to do it, or they're incentivizing you not to do it.
And then, um, you know, you're not going to do it for all the Goodwill in the world. You're not going to do it. Some money will still drive the decision, but we need to align that properly with the other value chains of the triple bottom line so that we understand how they all benefited
James Dice: [01:18:22] totally.
I love that I had a bunch of questions around it, but you, you kind of answered them all. So, um, I guess I'll just go with, with my final question for you. What are you excited about in
Shen Chiu: [01:18:31] 21? Um, it's nothing to do with technology. It's, uh, it's, all to do with, uh, spending more time outside. Um, I haven't been snowboarding.
I haven't been snowboarding for a while and I'm jealous that you were able to go cause I can't travel to any of the places that I'd want to travel. So, um, I haven't been on skis or snowboard for a number of years now and I'm definitely feeling the bug. I'm watching a lot of Travis rice videos on YouTube.
Uh, watch the older. I'll never be in Alaska doing the stuff he does. Um, You know, I, I think connecting with people, you know, as much as the team stuff has shown us, we can do, like, still feel we're, a little bit too disconnected, you know? And, and, and in terms of, in terms of work, we've got some great new buildings in our pipeline.
Um, I guess I'm looking forward to more, so seeing how we can really roll out our portfolio strategy, um, and make some big changes. We're playing with AI and ML. Well, on a number of different fronts, to see whether we can find insights in the data streams that we're collecting, uh, across not just building data, but even corporate data to see whether we can do things better, whether we can find deltas, you know, that weren't otherwise obvious to us.
Um, But yeah, it will be, it'll be used, you know, I might well be retired before we have significantly aligned and structured data that we really get those values. I might be wrong. Um, things move pretty quickly, but then again, as you said, at the start, we are in the property industry and things seem to be moving very slowly.
Um, I can't believe that 25 years ago I was modeling three dimensional, structures. And twenty-five years later, people are still talking about whether there's value in coordinated 3d models. And why would we spend the money doing them? Uh, that kind of blows my mind, you know, 25 years ago, if we were doing it already, why are we still talking about it?
It should already be everyone should be just doing it. but yeah, that's a lot. And I'm looking forward to catching up with you face-to-face terms. I think that sounds like a snowball trip that the two of us need to have. Yeah.
James Dice: [01:20:31] Planning, uh, planning, uh, nexus summit. I think we talked about it a couple episodes ago.
I say planning. It's an idea at this point, not planning it all, but I need some help planning it. Um, but yeah, there are a lot of nexus pro members that are snowboarders and there's a couple skiers we'll let them come to. Um, So yeah, if you're wanting to, come to the nexus ski summit, you've got to join the membership so you can come for free.
So. Thanks so much for coming on the show. Appreciate
Shen Chiu: [01:21:05] it. And thank you very much, but it's a really impressive work that you're doing with the newsletter and the podcasts and stuff. So thank you as well. Yeah, it's great to have someone like you in the community, really leaning into it. My pleasure.
James Dice: [01:21:19] All right, friends. Thanks for listening to this episode of the nexus podcast for more episodes like this, and to get the weekly nexus newsletter, which by the way, readers have said is the best way to stay up to date on the future of the smart building industry. Please subscribe@nexuslabs.online. You can find the show notes for this conversation there as well. Have a great day.
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