Tackling technology obsolescence a priority for commercial asset owners
By Timothy Tay
/ EdgeProp Singapore |
A prominent concern among many commercial real estate asset managers, developers and landlords is the risk that the properties they manage in their portfolio today will be obsolete to investors and tenants five or 10 years down the line, says Thomasin Crowley, global director of Asia Pacific at WiredScore.
“A growing number of stakeholders across the real estate industry worry about providing an excellent user experience for their tenants, meeting sustainability targets, operating their assets more efficiently, plus demonstrating future readiness,” Crowley says. She adds that market expectations over the past few years are evolving to the point where every building needs to demonstrate its smart capabilities to remain relevant.
Since 2013, WiredScore has established itself for its real estate certifications in New York and London, as well as other major North American and European cities. Its eponymous WiredScore certification is a global digital connectivity rating scheme, while its SmartScore certification helps developers and asset managers define a smart building and promotes best practices to develop them.
“Our mission is to make the world’s buildings smarter, and we can’t pursue that if we don’t have a strong presence in the Asia Pacific (Apac) region, which is going to be the biggest region in the growth of commercial real estate going forward,” says Crowley.
Building momentum, extending education
In April 2022, WiredScore set up its first regional headquarters in Asia Pacific. The company chose Singapore as its base of operations in this region. “Our ambition for the first couple of years was to establish awareness and presence in key international hubs in Apac, which is why we started in Singapore, followed closely with another office in Hong Kong,” says Crowley.
WiredScore already had a foothold in the Australian market with an extensive track record working with Australian partners such as Lendlease, CorVal Partners, Credit Suisse, LaSalle Investment Management and Frasers Property Australia.
“Our first year in Singapore and Hong Kong was all about bringing education to the market around digital connectivity, building momentum among developers and landlords, followed by extending that education to tenants,” says Crowley.
Crowley: Leasing and branding, technical value, and building for the future are priorities among asset owners, coupled with a top-down policy to develop more smart buildings in Singapore. (Picture: WiredScore)
After nearly two years working the ground in the region, WiredScore has registered 143 buildings into its certification scheme, mainly across Australia, Singapore, Hong Kong and Thailand. Several buildings have also achieved dual certifications — of WiredScore and SmartScore — bringing the total number of certifications across the region to 167.
“We’ve now got 66.8 million sq ft of commercial real estate registered across the four key Asia Pacific markets. In Singapore, it’s 13 certifications across 11 buildings,” says Crowley. She expects that by the end of this year, four more commercial buildings in Singapore will be registered with a WiredScore certification and eight more certifications will be awarded.
The take-up rate for WiredScore’s certification schemes in Singapore surpassed the company’s initial expectations, says Crowley. “We came in with a hypothesis that Singapore would be a SmartScore-focused market — our smart building certification — but we’ve also received fantastic traction with our WiredScore certification.”
She adds that it is clear the dynamics of the commercial market in Singapore are unique compared to its counterparts in the region. “This condenses down to four growth drivers [in this city-state]: leasing and branding, technical value, building for the future, and a growing interest in developing smart buildings.”
Singapore also benefits from a particularly strong mindset of investor reporting as well as a focus on environmental, social, and corporate governance (ESG) that is entrenched here, she says. “These are such important contributors because most corporate tenants and landlords need to report on their sustainability efforts, and most of the market recognises that they cannot hit their ESG goals without that technological component.”
Negating obsolescence
The challenge of certifying buildings varies from project to project and can be done at different stages of development for new projects, or already completed buildings, says Crowley. For example, an upcoming project the team is involved in is the redevelopment of Singtel’s Comcentre at 31 Exeter Road.
The telecoms company has announced a partnership with Lendlease to redevelop Comcentre, originally completed in 1981 as its corporate headquarters, into a $3 billion new asset with the latest smart and digital technologies. The development will comprise two 20-storey Grade-A office towers and 32,280 sq ft of ground-floor F&B, lifestyle and retail space. Singtel and Lendlease have announced that it is targeting various health, technology, and sustainability ratings, including BCA Green Mark Platinum (Zero Energy), Well Platinum, and WiredScore and SmartScore ratings.
The redeveloped Comcentre aims to clinch BCA Green Mark Platinum (Zero Energy), Well Platinum, and WiredScore and SmartScore ratings. (Picture: Singtel)
“As the development team sign off the conceptual design and the various space allocations, that will be the key moment for us to step in. We will tap into our partnership model which sees us work with local experts who understand our standards,” says Crowley.
The biggest challenge any landlord or developer faces today is the increasing risk of obsolescence of existing assets as well as new developments. “If you ask me, the one thing that everyone in the market is concerned about now is the risk of obsolescence,” says Crowley.
She adds that asset managers are very concerned that it will become more difficult for ageing real estate in their portfolio to meet expected benchmark accreditations such as Green Mark Platinum, and this is a major concern for investors as well, she says.
“When it comes to the retrofitting of smart systems, it broadly comes back to assessing what you have today to create a baseline — this is what our SmartScore certifications can help asset owners with to kick-start the journey,” she says.
Crowley adds that many older commercial buildings in Singapore need to establish this baseline in order for owners to understand their requirements and limitations. “You’re going to struggle a bit if you haven’t got the core infrastructure in place, but there is still much you can do in terms of retrofitting,” she says.
An example of a great retrofitting case in Singapore is Keppel Bay Tower, which clinched a SmartScore Gold and a WiredScore Platinum in June last year. “These are fantastic outcomes for an existing asset and retrofit technologies,” says Crowley.
An example of a great retrofitting case in Singapore is Keppel Bay Tower, which clinched a SmartScore Gold and a WiredScore Platinum in June last year. (Picture: Keppel Land)
Working with local experts
Assessing the company’s performance in Singapore and the headway it has made in Hong Kong, Thailand and Australia, Crowley says that the enthusiasm among asset owners and developers has been very encouraging. With a long pipeline of new commercial projects in Thailand, many developers there are keen to display their projects on the global market, she says.
The most prominent new development to attain WiredScore and SmartScore certifications is One Bangkok by Frasers Property. Three of the five Grade-A office towers were the first in the country to attain WiredScore Platinum.
“Looking ahead, we’ll use the bases we have established in Singapore, Hong Kong and Thailand to explore more ways that allow us to serve more parts of the Southeast Asian market,” says Crowley. “A key to fuelling our growth is working closely with accredited partners on the ground in various countries and localising with local experts.”
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