Technological advances have been gathering pace at an astonishing rate, forcing industries worldwide to adapt – the real estate sector is no different. PropTech has one common goal: to innovate, using technology to simplify the real estate market.
With the fundamental objective of reducing the impact of the built environment, stakeholders such as investors, owners and landlords are seeking to optimize the environmental, social and governance performance of their properties. This, in turn, increases the lettable value and saleability of real estate, driving the continual improvement of existing and new commercial building stock. Moreover, tenants are increasingly demanding more sustainable and healthier, safe, buildings in which to live and work, with the onus being on owner-investors to make this possible. Improved employee satisfaction and wellbeing strongly contribute to greater focus and creativity at work – factors which influence occupiers’ decisions.
PropTech for risk management supports this, and is just one key way that owners, investors, agents and corporates are looking to get more out of their real estate, whilst concurrently improving and simplifying their roles in risk management. Good PropTech for risk management should be easy-to-use and bring together different workflows into one central system, ensuring that any portfolio has full visibility of risk performance in real time.
With less time spent managing risks, users can benefit from the in-depth analysis and reporting capabilities available. Essential to such a system is an intuitive dashboard, providing a vast array of performance reports and key management information, from almost any data stored within the system, quickly identifying where effort and budget should be spent to improve portfolio performance.
Below, we highlight how PropTech for risk management can help organisations reduce risk.
Gain a competitive advantage
PropTech for risk management is ideally suited to assist with the process of meeting organisations’ needs in terms of storing information, statistics and running reports to meet GRESB objectives, and monitoring and driving continued ESG performance improvements.
By analysing and acting on data, investors optimise their ability to make informed decisions and improve the health, safety, sustainability and wellbeing performance of their portfolio, allowing them to gain a competitive edge from having accurate and current data.
Examples of the type of data that can be tracked are identified below:
- EPC – used to establish which properties may fall below the MEES Regulations, owner-investors may then plan and track improvement strategies or mitigation plans to ensure that all properties within the portfolio remain actively lettable or saleable. Ultimately, driving protection of asset value and returns.
- Accident and incident – organisations can record the full detail of any incidents, for example incidents involving people, property damage or environmental as they arise, ensuring that a full audit trail is stored, in the case of potential claims or litigation. Floorplan marking and root cause analysis enables organisations to track and analyse data, helping to prevent future incidents.
- Statutory engineering – Software links to extract information straight from statutory engineering providers’ web systems, e.g. Allianz, Zurich can be set up to directly populate a system with dates of inspections, PDF report copies and logging of any highlighted actions or maintenance items for resolution. Such a system is typically configured to highlight any ‘Plant Not Available’ instances, missed inspections or high-risk actions raised, and can quickly generate email escalations to the relevant personnel.
- Units – void and vacant – organisations have clear visibility of site risks identified, directly escalating any high-risk actions by email. Inspections can also be undertaken directly whilst on site using an app, which collects photographic evidence and notes actions, ensuring actions are instantly tracked and managed through the client’s system.
Owner-investors may then plan and track improvement strategies or mitigation plans to ensure that all properties within the portfolio remain actively lettable or saleable, ultimately driving protection of asset value and return on investment.
Improving the visibility of risk
Collecting and logging data regarding compliance inspections, valuation or insurer surveys, or even security checks side-by-side, allows owner-investors to see the type and the severity of risks present within their portfolio and their potential impact on asset value and protection, allowing overall control of prioritisation of actions and even investments into certain areas through the managing parties. Using a risk management software can help provide detailed trends and analysis of this data, both for compliance obligations and also the tracking of best practice items and continual improvement elements. One property, fund or portfolio can be effortlessly benchmarked against another, whilst identifying multiple opportunities to improve performance, ahead of GRESB data submission.
New functionality is constantly being developed and enhanced in the risk management arena to ensure systems meet evolving requirements, examples include:
- 3D CADs – providing clients with a unique insight into the risk and action locations within complex buildings. Compiled using other sources such as accident records, fire evacuation plans, risk assessment actions and asbestos locations, the drawings can then be imported into the system for easy viewing.
Users can easily identify and proactively track any incident hot spots or hazardous areas and swiftly focus efforts on the risks which pose the greatest impact on sites.
- Digital Asbestos Registers provide an easy way to monitor and manage asbestos locations across a property portfolio. This functionality enables users to track Asbestos Containing Materials (ACMs) on a per property basis whilst maintaining a full audit trail detailing any remediation works. Importantly, this provides visibility for all parties, including owners, agents, contractors, and tenants.
- Tenant management enables the collaboration and cooperation of risk management between all parties with responsibility in a building, ensuring tenant impacts to buildings are minimised.
- Business Continuity features to enable the identification of properties in high risk areas at any given time, as well as tracking business continuity processes and assessments.
Risk management systems rely on their users’ feedback and recommendations to remain current in a rapidly changing sector – those who fail to pro-actively listen to and act on user feedback do so at their peril.
A simpler approach to ‘readiness for sale’
Property owners and investors can also use PropTech systems to facilitate readiness for sale, as it can maintain records on several disciplines, including health & safety, asbestos, environmental and contractor documentation. Additional information required for the transaction process which can also be stored includes: tax information, land registry documents, lease details, tenant information, insurance policies and utility data.
Data on health & safety can also easily be compiled and provided to the purchasing party, with system functionality ensuring that every required inspection has been completed, any mandatory documents are uploaded and stored, and any corrective actions are tracked to resolution. This may include all statutory requirements surrounding health and safety, management of water systems, electrical testing, asbestos management and fire safety.
Essentially, where the day-to-day management of a property is maintained through a system, all records are automatically stored and can instantly be made available to any parties involved in a transaction. Typically, risk management systems automatically maintain a full audit trail, escalating items for resolution prior to the transaction.
The benefits of using property risk management software to facilitate readiness for sale are well-documented and in addition to enabling the more effective day-to-day management of a property, it can help ensure an easier transaction, improve visibility and certainty for all stakeholders in the transaction process, and reduce costs and delays of transactions.
With new technologies come greater efficiencies – PropTech for risk management can bring huge benefits to those working in real estate willing to embrace innovation. In an ever-changing technological landscape, being able to anticipate and react to change is crucial.
As a GRESB Premier Partner, the S2 Partnership works with clients worldwide, implementing RiskWise to assist organisations with portfolio risk management to help meet GRESB objectives, and drive continued ESG performance improvements. To find out how RiskWise can help your organisation, please contact us.
This article is written by Rob Mead,Software Director, S2 Partnership.
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