The revolution of robots has begun – will it bring a sweeping change to the entire real estate market?

‘Are there areas of facility management where robots have already taken over? How will proptech affect operating costs? And how can the profession be popularized for the generations to come?’, asked István Rézsó, Head of Business Development, Cushman & Wakefield, at the FM+PM panel discussion of the Property Investment Forum 2018 conference.

More than half of the audience expect that proptech is not going to affect operational costs, whereas a third of the respondents think the new technology will bring about a rise in operational costs in 3-5 years. Only 15% of the respondents expect a decrease in costs. The conclusion of the macroeconomic workshop of the conference was that the sector has to go at full throttle as long as the market environment is favourable, so we have to ask the question whether this approach can be valid in facility management and whether proptech might be an answer for that.

‘Going at full throttle on a winding road and on the finish straight of a Formula 1 track are not the same things. Everyone has to think over their strategic goals and whether it is worth investing into technology. Since proptech usually comes with hefty investment costs, it is also a watershed, as not all smaller companies are able to invest into developments like that. We often tend to expect technology to solve all our problems, but it is the strategic goal that has to decide whether it is worth applying that technology and not the other way around’, said Attila Prosits , Business Development Manager – Property Management, Gránit Pólus.

‘For example in the retail industry labour shortage is as high as 30%, meaning for every 100 positions there are only 70 workers available, which should encourage technological developments. Even if Westend has 21 million visitors every years, it is still a conventional shopping mall. Although we are testing apps enhancing the shopping experience, it is basically still people serving people. On the other hand, our new project, Central Park will be completely different as technical devices will be fully integrated into interpersonal communication. Using the latest technologies is second nature to the young generation and they do not want to choose conventional occupations but rethink problems with digital tools. Employers have to adapt to this change so that the workplaces of the future be alluring to younger job seekers as well’, said the expert.

‘We are a company with close to 60 years of history and the average age of my colleagues is close to 50, which means if we don’t integrate technology into our everyday tasks, we simply won’t be able to find manpower. In heating services it is obvious that everything is modern and up to date. Similarly, digital technology is indispensable for ensuring reliable service, even with the increase in costs. The question, therefore, is not how to cut costs, but whether we want a functioning company, since energy is still and is expected to remain more expensive than the current IT investments, which are necessary not only in heating services but also in cooling or solar panel technologies’, said dr. György Mitnyan, CEO, Főtáv.

‘Let’s see a simple example. We have a total of 4500 endpoints and cooling centers. The best way to describe them is like a transmission gear in a car. If it is not engaged we cannot distribute the energy. By mid 2020 all our 4500 endpoints will be digitally controlled, which means we will be able to adjust the heating of  248 thousand households with a few pushes of a button, in other words, with the help of a computer, 6 dispatchers will need only half an hour to be able to test the entire system before initiating the heating process, in sharp contrast to having to send a car to each of the 4500 endpoints. If there is a sudden cool or hot spell, the energy supply of Budapest can be reprogrammed. Depending on whether the change is coming from the Buda or Pest side, we can set how much energy we should channel to which heat center by half a degree.

From this perspective, therefore, we did not replace manpower, nor did we increase the number of employees, and yet, we can provide up-to-date services to the tens or hundreds of thousands of consumers who chose heating services. In our sector the technologies my colleagues are currently establishing can mean a sort of environmental awareness and sustainability’, added the expert in the opinion of whom up-to-date technologies are easy to learn regardless of age, and with a healthy level of help and executive pressure the generational differences can be bridged.

‘I would like to join this with a new development of ours. It is a system that detects any malfunction, for example a broken water pipe in an office building late at night, and intervenes immediately, closing the pipe in question and sending an error report SMS or email to the facility manager. This means the janitor won’t have to go to the premises late at night or wait till the water level reaches 10 cm in the building. This is also in line with the philosophy that we don’t automatically replace manpower, but we bridge certain requirements so our colleague can go conveniently to the premises at 10 o’clock next day and fix the problem’, said Csaba Pölcz, Regional Leader of HU/RO/BG, Uponor about the possibilities of proptech.

Concerning labour shortage, in his view we are still lagging behind, for example, Austria in terms of productivity. We may be saying we have a shortage of 60 thousand workers in the construction industry, but it may very well be the case that with proptech or better organization it wouldn’t be a problem at all. What is also important is that in the future, on-site work will be increasingly replaced with plug and play solutions, in line with our direction, which will not only result in savings in terms of implementation time and costs but also decrease later error possibilities. In my opinion, every technology requires a learning process and the development of routines, therefore there should be an interim period here too until the new technology is learnt and efficiently used.

I am a little scared of proptech because many expect it to have a decreasing effect on operational costs, but it is not so easy. Surely there will be items the cost of which will decrease, but altogether we cannot expect an overall decrease in the cost level. We are developing an in-house cleaning robot, which we will deploy – where necessary – in 2019. Many people look at robots as a replacement of the currently insufficient human labour, but 4 years ago, when we first started to think about providing something other cleaning companies don’t, we looked at robots only as an extra service. However, later we saw that the areas where we could create these robots are currently not facing a big labour shortage. In most of the world, labour is sufficient, labour shortage is only plaguing Europe, where robots can serve a sort of supplementary service role. But human labour will never be replaced even by robots, 80-85% of facility management requires human labour’, said Csaba Szij, Deputy CEO, B+N Referencia Zrt.

According to the expert, wages cannot be increased infinitely, therefore it is efficiency that needs further improvement. However, human capacity has a limit, which can be extended only with the help of tools, like robots. Proptech might help in making the young more interested in facility management, but the more important thing would be to increase the public appreciation of these professions. However, technology can help make these vocations more competitive.

‘I agree that proptech will not be able to help everywhere, but there will be new demands which will be easier to meet with the help of technology. Proptech is not a magic pill against labour shortage. We encounter quite a few solutions, part of which are aimed at managing the labour shortage, but the other, significant part strives to meet demands users come up with. If we think about only our lives, how we lived 5 or 10 years ago and how much has changed in terms of digitization, be it mobile usage or smart devices, it is inevitable that part of these changes surface in already existing services of office buildings too’, said Lőrinc Zátonyi, director, special projects, STRABAG Property and Facility Services.

‘However, the appearance of exterior pressure, like the new GDPR or an environmental safety regulation, might make the application of proptech solutions necessary. I believe there are a lot of obstacles in the way of replacing human labour with robots, one being the lack of a new way of thinking. For example, as long as the public expectation is to have a flesh-and-blood person sitting at the reception desk, the introduction of a reception robot cannot bring the required results or replace human labour in Hungary’, added the expert.