PropTech Innovation: From Smart Buildings to Smart Cities
Our fifth installment of Framing the Industries, looks at how innovations in smart housing systems disrupt the property sector.
The Internet-of-Things (IoT) in conjunction with machine learning technologies, are fundamentally changing the way in which both buildings and cities are managed. Just recently, Bitkom announced that 50 German cities are on the way to becoming smart. However globally, the IoT smart building market alone will reach $51.44 billion USD by 2023 as Research & Market predict.
With the digitalization and automation of the real estate and housing industry, housing management systems can now leave behind the dusty basement boiler room.
So what does ‘being smart’ actually mean? From buildings to cities, the underlying vision is to have urban communities that can maximize building efficiency and living space quality by harvesting property-related data — through intelligent systems, smart devices and sensors — and in a second stage, allowing visionary thinkers to generate untapped data-driven business models.
Giving Context to Smart Buildings and PropTech
Beginning of the 1990s, long before the 4th Industrial Revolution started, digital automation officially moved into housing infrastructure. Arguably it all began with the thermostat. This small system, installed in most buildings and apartments built post-1990s, is a component which senses the temperature of a physical system such as a heater, and performs actions so that the system is maintained at a desired equilibrium — in the case of a heater, at a desired temperature.
A decade later, in the early 2000s, a paradigm shift occurred which effectively led to the current industrial stage: connected buildings now represent the third largest IoT segment in terms of global share of public projects, as IoT Analytics reports. IoT is intrinsically part of the important transition to what Germany has coined as “Industry 4.0”, which offers new business opportunities, as our CIO Martin Buhl highlights here during an interview on the topic:
Over the past decade, building automation has been propelled by a demand to reduce energy and operational costs. Similar to the inclusion of the smart thermostat into housing infrastructure, with IoT, a new wave of devices and sensors in fact now offers profitable applications. From fridges who independently order milk once stocks run empty, to motion sensors for switching off lighting in unoccupied spaces, to heating systems that know when to turn on or off, and even doors that can be opened with a smartphone.
Building security also plays a significant role in this paradigm shift, as intrusion detection expanded from passive alarms to corporate-wide access controls, minimizing manual security work.
In each of these use cases, cost reduction has been the main driver, along with a straightforward return on investment as described by McKinsey. Moreover, the opportunities to exploit generated data to develop data-driven business models remains the gold vein to be tapped.
Business Opportunities in PropTech
The report Guide to IoT Innovation: Achieving Innovation Performance by IoT Analytics identified IoT as enabling the third wave of digitalization with over $11 trillion USD of business opportunities. It is a given that increasingly more connected and smart devices will gradually enter the market: McKinsey predicts that by 2020 some 30 billion objects may be connected to IoT — largely due to a coincidental decrease in the deployment cost of these and the profitability behind data-driven business models.
In upcoming years, various IoT applications and sensors will be introduced into the properties of housing companies and private homes for diverse uses: monitoring energy generation systems, measuring devices, elevator monitoring, wirelessly maintaining or networking smoke media, and various types of sensors. All of these systems are not yet interoperable and at this point do not offer a holistic approach to what can be considered ‘smart’.
Instead of installing a separate communication system for each application, it makes sense to use a universal communication structure such as the one offered by one of NBT’s ventures, METR.
Beyond further cost improvements for the real estate sector and the problem of interoperability, the next focus is on improving the user experience — a lack in most of these highly technical applications.
METR as Solution Provider
Part of NBT’s high-tech portfolio, METR, addresses real world challenges using technology in novel ways to meet modern industrial needs. Situated in the PropTech and Smart Housing sector, METR’s goal is to bring more transparency into the condition of technical systems in buildings and to make the management of living spaces more efficient.
Their gateway M-Gate — which is compatible with various radio protocols and can be used for the interconnection of different technical systems — is a multifunctional system that brings together IoT solutions of buildings. The gateway’s interoperability is achieved by a modular structure, comprehensive interfaces from and to devices of other manufacturers, as well as data abstraction based on machine learning taking place on the platform.
Beyond submetering, the gateway enables a range of applications and use cases. One of these is the so called Anlagenwächter (German for “Gatekeeper for technical systems”) — which allows remote monitoring of technical systems so facility managers are informed about e.g. the operating status of the heating system, the pump or the elevator. In the future it will anticipate maintenance needs.
Data generated from the M-Gate is then sent to a platform where METR processes & analyzes it to produce valuable insights, leverageable by housing companies and service providers in order to increase operational efficiencies. In due time, the platform will also obtain enhanced data analytics tools enabled through machine learning capabilities.
Next to the M-Gate and the platform, METR’s solution also includes a portal where customers can get target-group-specific information. This work facilitation allows to enhance efficiencies in maintenance and also provide a transparent overview to the housing residents.
At its core, METR offers IoT solutions for the housing industry, pioneering the integration of “intelligent devices” for buildings, and leveraging machine learning technologies to make buildings truly smart.
Our Venture Portfolio
At NBT, we provide new opportunities via a validated tech portfolio with strong growth potential and dedicated teams. Our PropTech venture, METR, is on the right track; they recently announced their second corporate partnership with Mannheim’s GBG Group.
Beyond PropTech, NBT’s unique approach supports venture developers in building novel IoT-based solutions across other verticals such as Energy, Healthcare, Logistics, and the Data Economy. Visit our venture portfolio for more companies we successfully co-founded.
