Smart Offices

Abstract

Technology appears to be changing the most fundamental truth about commercial real estate, namely that value is mainly based on location. Technology is nowadays increasingly used to upgrade real estate and new concepts are emerging, among which smart offices. Smart offices are office buildings that are equipped with technology. They aim to make communication between human and computer more natural, make office work easier and meet the goals that buildings nowadays have, which are energy and efficiency, longevity and comfort and satisfaction. The contractor of this research, JLL, works for both real estate users and – investors. This study examines what factors make smart offices attractive to these users and investors and whether this leads to a price premium (eventually) being paid by them. By making use of interviews with stakeholders in the smart office market this question was examined. For occupiers sustainability and additional cost savings, the improved comfort and improved satisfaction are factors that make smart offices attractive. For investors it seems easier to rent office floors in smart buildings. Also the lower vacancy risks and the ability to maintain your property in a predictive way are factors that make smart offices attractive to investors. Both occupiers and investors indicate that location factors are still more important than technology in a building. Moreover, investors indicate to look at the tenant's characteristics and the duration of the lease contract. For tenants, the willingness to pay a price premium for smart property differs. Investors are not willing to apply sharper yields for smart offices yet. Nevertheless, how the attractiveness of smart offices, for users and investors, will develop in the (near) future is still quite uncertain since the market for smart offices is an upcoming market. More research on the topic needs to be done to examine whether the expected improvements that smart offices will bring about actually make a significant difference.