Activating smart alpha to optimise wellness and energy performance

40 Holborn Viaduct is a prime example of how activating our portfolio with smart alpha can help to enhance occupier experience, drive energy savings and optimise maintenance – all in line with our goal of developing a sustainable portfolio where the customer comes first.

We partnered with Verco Advisory Services, and a smart prop-tech provider, Demand Logic, which has grabbed the attention of the real estate management industry for its bold and disruptive approach to energy management. Described as the ‘FitBit for buildings’, Demand Logic transforms a ‘basic’ building of bricks and mortar into a living ‘digital asset’ where energy data drives energy performance. To deploy the solution, we collaborated to develop an innovative commercial model, where the energy savings from the Demand Logic solution were guaranteed, underwritten by Verco Advisory Services. This de-risked the investment and ensured that our customers received the benefit of lower energy bills. The project, first implemented at 40 Holborn Viaduct in 2017, is on track to drive a 20% reduction in energy use over a four-year period. However, in a market where real estate has moved from a product to a service, we wanted to go further with a holistic offering to deliver top-quality space that drives customer satisfaction. This requires much more than optimising energy performance alone. Our aim was to partner with an innovative wellbeing solutions provider to help shape their pre-market (‘beta’) stage product into a best-in-class solution for the institutional market.

There has been much talk in the real estate market around health and wellbeing, and how a happy workforce has a positive effect on productivity and can contribute to profit. However, it seemed that the science of health and wellbeing is very difficult to measure and act on, and many of the solutions which are being brought to us weren’t fit-for-purpose – often an ‘afterthought’ to existing building management platforms. We are aware that for an effective wellbeing solution to work, it has to be a dedicated product that is 100% human centric. Offering 40 Holborn Viaduct as a 16,000 sq m ‘Living Lab’ in the City of London, we worked with Arbnco to help create a new way to assess and enhance the wellbeing of buildings. The result was a solution which helped to reduce indoor pollutants, encourage activity and social interaction, and maximise natural light – all of which, we believe, has a positive effect on the customer and on the bottom line.

40 Holborn Viaduct demonstrates that enhancing the wellbeing performance of a building and optimising operational performance is often symbiotic. For example, we found that reducing ‘hot and cold’ complaints from our customers was directly related to the optimisation of the heating and cooling systems in the building, and how efficiently they were using energy. The end-user for these tools are also the same – usually the Property Manager, or their Facilities Management team. By integrating the Demand Logic and Arbnco systems, we can tackle the energy and wellbeing factors simultaneously, therefore delivering a more holistic and greater quality of service overall.

In addition to 40 Holborn Viaduct, the promotion of customers’ health and wellbeing is a way to generate alpha across our wider real estate portfolio. At Nuveen, we are committed to pursuing wellbeing certification across the United Kingdom, including the WELL Gold Certified 70 St Mary Axe in the City of London. We also engage and collaborate with technology companies who can add value in this space. In 2018, we undertook a tender exercise across our European and Asia Pacific property portfolio to identify technologies and innovative solutions that could further enhance the operational performance of our properties from both an energy and wellbeing perspective – with 30 projects planned to go live in 2019.