How did your collaboration come about?
Grigor Hadjiev: Data is at the heart of our investment and asset management strategy. The buildings that make up our real estate portfolio are starting to generate a lot of data and its exploitation is crucial. We therefore approached Square Sense to collect and structure this data.
Antoine Ziliani: I think we were in the right place, at the right time and with the right solution. The creation of a portfolio by exploiting the data of its buildings is the central element of our solution.
Could you describe the integration of Square Sense technology into Allianz Real Estate's property portfolio?
GH: We have launched an ambitious building digitalisation programme in 2019 with three main objectives: improving environmental performance, creating a service offering for tenants while supporting their return to the office, and streamlining our operations. These points require an understanding and structuring of the data so that the asset manager can interpret it. Allianz Real Estate can then make decisions.
How does this integration work?
AZ: There are two levels of integration: one is purely technical and consists of connecting the various data sources available in the building. It is then a matter of giving meaning to this data and this is our role as data scientists. The second level lies in the processes, in getting asset managers to use the data. There are real managerial challenges in supporting these professions and changing their practices. Anticipating, accelerating and making decisions more reliable, with a view to financial and environmental impact. Square Sense represents an objective third party for measuring these different elements.
Can this technology be deployed before an acquisition?
GH: Any building, whether it is built or not, generates data that can then be processed by Square Sense. It seems interesting to us to analyse potential acquisitions from this angle. However, it is still early days and the market is not mature enough for us to have these elements upstream.
AZ: Allianz Real Estate is preparing to enrich its assets with historical data. When legally possible, the transmission of this data to potential buyers offers an increase in the value of the asset.
Do you think that this transmission will become more widespread or even compulsory?
GH: In the near future, some buildings will have to be equipped with an equivalent of the BMS that centralises the operating data of the buildings. The purpose of this operating platform is to consolidate the energy data of buildings. We are convinced that the data generated by a building is an asset in itself and that the operation of this asset will be the standard of tomorrow. The data recovered all meet the requirements of the General Data Protection Regulation, both in terms of the protection of this data and our responsibility in its processing.
How is the integration of this technology into Allianz Real Estate's portfolio materialising?
GH: Our ambition is to set up a partnership system that will allow us to have reliable equipment in buildings that can be used by local partners, whether in the United States or in Asia, with the ultimate goal of ensuring that each building has the best technology. For example, the building occupancy data speaks for itself: the entries to a building allow us to observe the return to the office and its conditions. What we see is that employees return unevenly from one country to another, but above all that they often return on the same days. This type of behaviour is unexpected and needs to be measured.
What kind of decision follows from this type of analysis?
GH: Up until now, everything suggested that the home office would kill the office. However, these group behaviours prove the opposite and prevent a considerable reduction in floor space. This trend leads us to think about more flexible and attractive offices for users, for the same number of square metres. Data helps us to better understand new uses and to anticipate users' needs.
AZ: We have not yet identified all the possible uses of data and that is the interest of this job and the salt of this adventure. Access to this phenomenal source of information triggers an extraordinary source of value. Exploiting this source is a huge differentiating factor for Square Sense and accompanying Allianz Real Estate in this process is a fantastic opportunity.
What characterises your partnership?
GH: It is very important for us to be sure that our partners have a very strong local presence. The interpretation of the same data does not translate into the same action in each country, hence the need for a local partner to centralise and coordinate the data at the asset level and then to be able to draw conclusions at the asset level. I would like to take this opportunity to point out that ownership of the data is essential for us. Square Sense operates as a data analyst for our buildings on behalf of Allianz Real Estate, they are part of the team while at the same time being external to it through an in-depth sharing of their methods and operating modes. We wanted to be our own data scientist but the rapid evolution of trends led us to favour a partnership to start with.
AZ: We are establishing ourselves as the operational partner of Allianz Real Estate. Trust is paramount in this partnership and data ownership is one of the keys to this trust. We have never pretended to exploit the data in our corner, creating value means creating this trust.
Interview by Alban Castres
Originally published in French on the website of Décideurs Magazine