Exploring data-driven Real Estate: An interview with Louis Savouré

July 16, 2024 | 7 min read

Share this article

SQUARE SENSE

Square Sense is the leading PropTech shaping the digital transformation of real estate asset management

On June 6, 2024, Charlotte AMIC and Philippine HARAT from Avison Young, a global real estate advisor, interviewed Louis Savouré, our Senior Data Asset Manager at Square Sense. We are grateful to them for giving us the opportunity to discuss the latest developments and insights in data-driven real estate management.

Louis, thank you for joining us today. Could you start by explaining what “data” means in the context of a building?

Of course. To understand what we mean by “data” in a building, we need to know how and by whom this data is created. In office real estate, data is generated by tenants, property managers, asset managers, and portfolio managers. Everyone contributes to this data pool. When we talk about building data, we’re referring to all information related to the building’s usage. The main challenge is making this data transparent, reliable, and accessible to everyone. Achieving this transparency is our biggest hurdle today.

What types of data are we talking about?

We’re discussing various types of data. This includes financial data, building data, and usage data such as physical occupancy, traffic, and services. It also covers comfort data like temperature or humidity and air quality data such as CO2 levels. Additionally, we include cross-category data like energy and water consumption, which are both sustainability and expense data. All these types of data are crucial for improving building operations. For example, understanding how often the canteen or meeting rooms are used. However, to unlock their true potential, you need to cross-reference this data. Just as rent price is meaningless without knowing the lettable area, any type of data gains value only when put into perspective with other references.

When you mention financial data, are you referring to the financial information of a building or the financial consequences of its usage?

Both. There’s purely financial data from the asset manager’s perspective, such as building valuation, leases, or tenant status. Additionally, there are financial consequences of the building’s usage and performance, like charges. The idea is to cross-reference data to give it meaning. However, data is often siloed—each stakeholder produces data independently, with no standardization or centralized accessibility—making exploitation and interpretation challenging.

What drives this demand for data?

The main drivers are increasing environmental concerns (I.e. regulations) and changing work habits, such as the rise of post-COVID flex office models. Environmental concerns are well understood and require data for compliance and progress tracking. On the other hand, the changes in work habits are less clear, and we are still figuring out their direction. In both cases, all stakeholders need to adapt but lack the necessary insights. We need trustworthy and standardized data. These perspectives are shifting us from a per-square-meter view to a per-occupant perspective. For example, future regulations may focus more on energy consumption per occupant rather than per square meter, which makes more sense given varying occupancy levels.

How do different occupancy patterns affect building management?

Every building and tenant has unique occupancy trends. For instance, an IT tenant might have few people in on Fridays, while a law firm might have a more even distribution throughout the week. Understanding these patterns helps optimize building operations, such as adjusting ventilation based on occupancy, which is crucial since HVAC systems can account for 50% of a building’s energy consumption.

Has the post-COVID shift to flex offices significantly increased demand for your services?

Definitely. The COVID-19 pandemic and the subsequent drop in office building values heightened awareness. Owners and managers now seek data to anticipate and mitigate risks, making data-driven decisions on investments or divestments. We’ve seen office occupancy stabilize at around 35-40%, about half of pre-COVID levels. This has led tenants to re-evaluate their space needs, driving demand for our services.

Your website is in English. Does this indicate an international presence?

Yes, we are global. We currently manage 2.5 million square meters across 16 countries and have offices in various regions. Initially, our demand came from international property owners with global portfolios, which led us to expand our activities, particularly in Europe. This approach allows us to run comparative benchmarks by country and better understand local specificities.

Do you notice significant differences between countries or cities in terms of data trends and building management?

There are noticeable trends based on location. For instance, office occupancy rates are generally higher in Paris compared to Frankfurt due to the higher cost of rent. These variations are logical and primarily driven by real estate market prices. However, location is not the only factor. Air quality and comfort can vary widely even within cities and are more related to the asset itself. For example, we noticed that newer buildings don’t always guarantee better air quality. It depends on the equipment and approach used. A building with optimized HVAC will always bring the best results.

Are there specific certifications that your solutions help achieve?

Yes, our sensor installations and KPI reporting enable ESG optimizations, helping clients meet certification requirements. More specifically, we are an accredited solution of WiredScore, which delivers the SmartScore certification, globally recognizing best-in-class smart buildings. Our solution allows clients to achieve Silver level upon installation, with the potential to reach Gold and Platinum with some optimizations. Our clients appreciate these benefits as they enhance the overall attractiveness and performance of their assets. For example, we recently helped a client achieve the first Platinum certification in Spain for one of their buildings in Madrid. Our data on energy, water consumption, and air quality are integral to such certifications.

How does artificial intelligence play a role in your data management?

AI is crucial for handling the large volumes of data we collect and for ensuring the reliability of the data we transform and display on the Square Sense platform. We also developed our virtual assistant based on a large language model, AMAIA, which helps users query our platform for specific insights. This integration of AI enhances our ability to provide accurate and actionable insights and recommendations to our clients, as well as improve the overall user experience.

Looking to the future, what developments do you foresee in the use of data in asset management?

The trend is shifting towards meeting the needs of tenants more directly. We’re seeing increased interest from large international companies looking to optimize their workspaces. This includes collecting data from desk occupancy sensors, which provide real-time data on workspace usage. The objective is to better align layouts with actual needs, moving from static to dynamic layouts. This approach improves the efficiency of rented spaces and enhances employees’ well-being at work.

A word to conclude?

I believe we’ve covered everything. To summarize, our focus at Square Sense is on making data transparent and accessible to all stakeholders, from asset managers to tenants and final users of the monitored spaces. This ensures that everyone benefits from optimized buildings, both financially and sustainably.