By Nicolette Maury, CEO of Avani Solutions
Walk into any premium office building in Sydney or Melbourne, and you might be impressed by the marble benchtops, the gleaming surfaces, the architectural flourishes.
But while the industry continues competing on these traditional finishes to some degree, a new competitive driver is emerging.
The smartest property professionals are discovering that the real competitive advantage lies not in what buildings look like, but in how they perform as engines for productivity. This can be measured across operational efficiency, employee wellbeing, and business intelligence.
Because buildings are no longer just physical structures, they're becoming critical productivity assets that drive measurable business success.
For instance, it’s already well known that buildings rated high on energy efficiency command a premium over those that don’t. As one example, a 5 or 6 star NABERS rating commands an 18 percent premium over unrated properties. Properties with 5.5-star ratings enjoy 10 percent higher rents and reduced tenant turnover.
Yet the real opportunity extends far beyond energy ratings to leveraging buildings as productivity multipliers for everyone inside them.
Here are three ways building performance can deliver valuable productivity gains.
Productivity driver 1: Operational efficiency that transforms the bottom line
The most immediate productivity gains come from automating tasks that would otherwise consume countless hours of manual labor.
Consider the building manager who spends 30 minutes a day closing fire doors manually - smart building systems can eliminate this need entirely. Or ESG reporting that once required weeks of manual compilation can instead be generated into stakeholder-ready reports created automatically.
Smart building systems also analyse data during both regular working hours and off-peak times, with building automation systems saving 10 to 20 percent of total building electricity consumption through optimised operations during previously invisible hours. These savings all add up to bottom line dollars.
But the real transformation occurs at a portfolio level.
A building platform that is connected across an entire portfolio can consolidate hundreds of thousands of bits of information into one centralised view, allowing building managers to create massive portfolio-wide efficiency changes without trekking across locations.
The gains are clearly enormous for larger portfolio owners doing this at scale. But it’s actually particularly valuable for smaller portfolio owners whose small staff of facility managers may be stretched too thin to be able to make effective changes across multiple buildings.
Productivity driver 2: Workspaces that boost human performance
Building productivity gains can also look like the performance, wellbeing, and retention of humans inside said buildings.
Take Harvard research, for instance, that shows occupants in high-performing, green-certified office environments scored 26 percent higher on tests of cognitive function. These research subjects also had 30 percent fewer symptoms of “sick building syndrome” - a situation where building occupants experience adverse health effects that are linked to the time they spend in a particular building. A happy workforce is a more productive workforce.
Improving conditions for humans also has a bottom-line impact. Improving air quality through higher ventilation rates costs less than $40 per person per year, yet productivity benefits from doubling ventilation rates are roughly $6,500 per year. That's an impressive 162-to-1 return on investment!
And finally, sustainability features can also create additional “stickiness” through values alignment.
When employees prefer working for companies in environmentally responsible buildings, tenants themselves become stickier. This creates a double benefit for building owners through both improved tenant retention and higher employee satisfaction within those tenancies.
One anchor tenant we know of became so frustrated with their lack of environmental visibility that they demanded enhanced building data access as a mandatory requirement for renewing their multimillion-dollar lease.
Ten to twenty years ago, it was almost an unwritten rule that you never expose anything to tenants. Now tenants demand data to understand their environmental impact and achieve carbon reduction goals.
Productivity driver 3: Integration with intelligent business systems
Perhaps the most transformative opportunity lies, however, in integrating buildings with the AI-based business systems that companies are rapidly implementing.
This isn't just about smarter HVAC or lighting, as traditional building management systems are often limited to monitoring. It's about buildings that can seamlessly connect with owners and tenants' business systems and technologies such as, in the case of our client Hoyts, a nationwide ticketing system that is critical to the customer experience.
Connecting building systems with business systems allows the buildings to adapt not only to environmental or occupancy triggers, but also to the strategic levers of the business itself, thus creating a holistic environment that supports the drivers that are most important to the business.
Because, in the end, there is still a place for marble bench tops and air hockey tables.
But true differentiation now comes from buildings that build productivity across all multiple operational levels, while empowering tenants with unprecedented control and visibility over their environment.
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