Get ready for a step change
THIS month saw the announcement that London's Square Mile is preparing to upgrade its public wifi after awarding a multimillion-pound contract to Cornerstone, a company jointly owned by Vodafone and O2.
Residents and workers in the area have much bemoaned the ageing and increasingly unreliable wifi service provided by The Cloud, once the pioneer in public wifi, and have welcomed the upgrade that will pre-empt and support the roll-out of 5G technology, due in the UK in 2020.
This development in London's financial centre is indicative of a race that is presently under way, between financial centres across the globe, to offer 5G wireless networks with faster speeds and capacity than have ever been seen before, and that are predicted to have a staggering impact on our relationship with the internet.
And, when you look at the numbers that are bandied about in relation to the economic impact of 5G, you can see why everyone wants to be first past the post.
One piece of research predicts the roll-out of 5G in the UK could add more than £7 billion a year to the economy by 2026. Another piece predicts that by 2035, when 5G's "full economic benefit is realised across the globe", the industry could produce up to $12.3 trillion worth of goods and services enabled by 5G.
Looking at these numbers, it's no surprise that the UK government announced over £1bn of spending on developing full fibre and 5G connections, and free wifi on trains and in public places, in its UK digital strategy 2017.
Connectivity is the key and the public, companies and workers want it faster, stronger and everywhere. By 2020, global internet traffic is predicted to be 95 times greater than in 2005. This figure is astonishing, and the rapidity of technological change combined with the role of the internet in modern work and living is in no doubt.
Predictions are that over the next decade the impending roll-out of 5G will result in a step-change in internet use, with changes as unknowable today as those that have come with the 4G services we have now been using for a decade.
As we approach this brave, new, ultra-fast, ultra-reliable, ultra-high capacity frontier, the connectivity of a building will play a more important role in determining its value to occupiers.
According to Cisco, video streaming and the use of smartphones will drive demand.
It predicts that as the use of streamed video becomes more embedded in working practices, building connectivity will become more and more vital to occupiers, and the emergence of bench-markers like the Wired Score connectivity certification are already picking up on this trend.
So, where are the opportunities in the commercial property market? As connectivity joins location and cost in the top priorities of occupiers, it goes without saying that new buildings will need to meet increasingly demanding technological specifications to entice occupiers, but what about existing stock? Can existing buildings compete?
In a word, yes. Many regions in the United States are presently seeing a redevelopment boom in commercial real estate. Dallas, which benefits from a recently-installed high-speed fibre ring, is seeing rapid growth as new owners revamp its existing towers with improvements that don't just include traditional common area upgrades.
The installation of new smart utility systems and modernised technologies, combined with network connectivity, is attracting tech start-ups and entrepreneurial firms that are more concerned with workers and machines being wirelessly super connected than ceiling heights and raised computer floors.
Across the globe these types of companies are giving Grade A space a new definition. Exposed ducting, open plan floor plates and industrial chic is no longer niche, but a viable working environment for companies with hundreds of employees, each of whom are as likely to be doing business on a smartphone in a break out area as sitting at a desk with a keyboard and monitor.
As 2020 approaches, we are only going to become more connected and the smart move is to develop smart buildings - whether new or existing.
:: Declan Flynn is managing director of Belfast-based commercial property agency Lisney