Yardi’s Richard Gerritsen sat down with Kirsi Simola-Laaksonen, chief information officer for Citcon, Nick Wright, head of digital sales for CBRE and Andreas Hoffman, managing director for Cromwell at the EPRA Conference 2021 to discuss the topic of data.
In the past as an industry, we’ve spoken about data at events, in person and online, and have always said ‘data is important,’ however, we don’t discuss why data is important or what we can do with it to make better-informed business decisions.
“We need to change our mindset about data”
Gerritsen begins by mentioning how we have a flawed way of thinking about data and that it’s based on when data wasn’t easily available, so you’d choose what you thought was relevant, and you’d make decisions on aggregated data that was out of date by the time you’d access it.
“Big data – everyone talks about it but no one really knows what it is and because we don’t know what it is, we think everyone else is doing it and because we don’t want to fall behind, we all claim we are doing it too,” explained Gerritsen.
Addressing the panel, Gerritsen asked, “When we talk about data and sharing data functionality, collaborating, not only with our service providers better, but also internally with our own organisation…would that improve the level of decision making and therefore improve your NOI?”.
Simola-Laaksonen responded saying, “A big yes from my part. Collaboration for me is putting our heads together and figuring out the solution that is not only beneficial for one party but for several. We’re producing something that’s of value for all – how does data fit into that? We always need data from various sources to make more informed decisions. The more data you have, the more you are able to validate your assumptions of reaching that goal.”
Speaking to Hoffman, Gerritsen asked if Cromwell had figured out what data they need for its management decisions, or if this would be a more in-depth journey. “I support the view that more data would help make right decisions and less costly decisions, but it’s a big challenge for us to get access to the data and organise the flow of data,” Hoffman replied.
Hoffman continued to say that he believes human interaction is an important part of real estate and it will remain an important part, however, with an analytical approach they would better understand the potential of the asset.
Human Interaction – Is it still needed?
The real question behind the use of data, is human interaction still needed or can you solely use extensive data to make those decisions?
Wright believes, “The data we have at the moment is there to support decisions. Clients are looking for decisions and support in everything they do, and those are ESG driven. We need the data to support those decisions as some of it is unknown as it’s not information we’re readily accessing or using in a traditional format. That combination of data and people is where we are today.”.
Hoffman expressed, “My vision is that the use of data and tools will significantly increase, and it’s not just the sheer amount of data or “big data”, it’s having the intelligence in place that shows you the pattern in the data and trends in the data.
I would predict for real estate that data and analysis will have a higher share in the future, but you still have to teach the machinery the correlations and have a say and input your experience. So, the human being will still have a fair share of that,” Hoffman continued
Static vs Dynamic data
Gerritsen asked Simola-Laaksonen what level of data generation is currently there for shopping centres and what may be there in the future in regard to static vs dynamic data. Simola-Laaksonen stated that live data would be the way to go and further down the road, predictive data that is relevant to the consumer.
“We need to bring certain values and benefits and anticipate their needs.” Simola-Laaksonen gave an example of anticipating the weather forecast and times of the year and using that information to remind the consumer to buy winter boots for their children, “That’s the way we can actually produce value and make the person feel that it’s easy to do shopping in our centres,” Simola-Laaksonen continued.
“It’s going to take time”
The main takeaway from the discussion is that it’s going to take time. Gerritsen posed the question, how will this ultimately have a positive effect on your NOI? And Simola-Laaksonen explained that it won’t be immediate, but it comes down to our own habits as consumers and how these take time to change.
However, as we know technology evolves quickly and our ways of working change rapidly, so as an industry, can we be patient or should we start planning to adapt already?
Wright believes we can, data is seen more of a USP as we aren’t collaborating and sharing that data publicly yet, however, patience may run out as we seek newer data. He went on to say how CBRE are already using location analytics data to help occupiers look for new office locations and scan different data sets to help with decision making. However, he believes that type of data isn’t ready yet. “Can we be patient? Yes. Because we’re beginning to get used to how this data helps us drive decisions. No, because we all want to get ahead. We want to be the person first person there, but until we’ve got those capabilities and we’re comfortable with using that data and understand the use cases and can show those case studies, patience is just going to have to be there. That’s just the nature of the industry until we get to that point,” Wright explained.
“In terms of sustainability, we can’t be patient”
In terms of sustainability, the panel agreed they can’t be patient and the way they look at data needs to change. Hoffman stated, “We need the data and the tools and we have to digitise our processes.”
Simola-Laaksonen added, “Nowadays things evolve exceptionally fast. We simply cannot use the same information we’ve used in the past to decide what data to use. That’s just the way it is. So, as to relevance, who makes the call, I think whoever has the need should make the call.
We first need to formulate the idea, the issue, the problem, the benefit, whatever the goal is that we want to achieve. We first formulate that. And then we go out there with an open mind to look at what we have,” Simola-Laaksonen continued.
The future of data is expansive and maybe we can be patient for now, but as an industry we need to be ready to evolve and change our ways of working if we want to keep up with the future of real estate.
The way we gather, view and use data needs to change because every piece of data can be effective and help improve your business decisions if you have the right strategy in place to use it.