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Case study

Activating smart alpha to optimise wellness and energy performance

Richard Hamilton-Grey
Director, Sustainability, Real Estate, Europe & Asia Pacific
40 Holborn Viaduct

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.

This material is provided for informational or educational purposes only and does not constitute a solicitation of any securities in any jurisdiction in which such solicitation is unlawful or to any person to whom it is unlawful. Moreover, it neither constitutes an offer to enter into an investment agreement with the recipient of this document nor an invitation to respond to it by making an offer to enter into an investment agreement. 

This material may contain “forward-looking” information that is not purely historical in nature. Such information may include projections, forecasts, estimates of yields or returns, and proposed or expected portfolio composition. Moreover, certain historical performance information of other investment vehicles or composite accounts managed by Nuveen may be included in this material and such performance information is presented by way of example only. No representation is made that the performance presented will be achieved, or that every assumption made in achieving, calculating or presenting either the forward-looking information or the historical performance information herein has been considered or stated in preparing this material. Any changes to assumptions that may have been made in preparing this material could have a material impact on the investment returns that are presented herein by way of example.

This material is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The information and opinions contained in this material are derived from proprietary and non-proprietary sources deemed by Nuveen to be reliable, and not necessarily all-inclusive and are not guaranteed as to accuracy. There is no guarantee that any forecasts made will come to pass. Company name is only for explanatory purposes and does not constitute as investment advice and is subject to change. Any investments named within this material may not necessarily be held in any funds/accounts managed by Nuveen. Reliance upon information in this material is at the sole discretion of the reader. Views of the author may not necessarily reflect the view s of Nuveen as a whole or any part thereof. 

Past performance is not a guide to future performance
. Investment involves risk, including loss of principal. The value of investments and the income from them can fall as well as rise and is not guaranteed. Changes in the rates of exchange between currencies may cause the value of investments to fluctuate.

This information does not constitute investment research as defined under MiFID.