51乱伦

A digital twin is a virtual replica of a physical asset, offering a way to simulate real-time scenarios and help stakeholders make more informed decisions. Experts Anna Emmison, Partner, 51乱伦 Valuation & Advisory, and Joe Warren, 51乱伦 Associate, discuss how digital twins can add real value for valuations, advisory services, and sustainability efforts.

Understanding digital twinning in real estate

鈥淎 digital twin is a virtual model of a building, a campus, or even an entire city,鈥� Joe explains. 鈥淚t continuously updates with real-time data, making it a powerful tool for assessing building performance 鈥� particularly useful for EPCs and making improvements to asset management strategies.鈥�

In real estate, digital twins provide a new level of insight, enabling clients to make more strategic investment decisions, and can enhance daily operations by providing accessible, actionable data.

What is the impact for valuations?

Simulating scenarios using real-time data from the digital twin allows valuers to support their clients with their strategic decision making. Anna comments: 鈥淭he ability to run simulations on building performance, market trends, and various other variables supports clients when it comes to deciding where to concentrate capital investment.鈥�

Joe continues: 鈥淔or the EPC pathway report, for example, we鈥檒l create the digital twin and use that as the baseline for the building鈥檚 current performance. We鈥檒l then make a copy and change aspects like the heating or lighting in certain areas, which tells us what the new EPC score is. It will also provide the anticipated energy use from those improvements, so we can work out what the cost saving will be, and an estimated capex cost. The digital twin allows us to see how changes affect the embodied carbon of the building, as well as how this information can be factored into other building certifications like BREEAM.鈥�

Digital twins provide the granular data needed to assess building performance and optimise asset management strategies. In a sector where nuance is crucial, especially given the diversity within commercial real estate, digital twins enable asset owners and investors to make informed, data-backed decisions.

Anna explains: 鈥淐ommercial real estate isn鈥檛 a single homogenous entity 鈥� there鈥檚 great diversity within the sector, not only between asset classes but also between individual assets. It鈥檚 this heterogeneity that will drive the sector forward, delivering future opportunities and driving performance above and beyond the market cycle. To capture these opportunities, asset owners and investors must understand the nuances of each asset, and to do that, they need robust, granular data at asset level.鈥�

Data is key, but context matters

While data from digital twins is crucial, context is essential to its value. Anna emphasises: 鈥淭he data should be digestible and practical, helping valuers to support their clients with their decision making without being overwhelmed by technical details.鈥�

The integration of digital twins provides transparency and clarity, particularly helpful when it comes to providing costed plans for asset management options. Anna notes that capex is a key component in property valuations particularly when clients are looking at refurbishment options, 鈥渄igital twins can provide a more numbers-driven approach to sustainability, making these theoretical discussions more tangible and actionable.鈥�

Informing ESG strategies

Digital twins also play a transformative role when it comes to ESG strategies and reporting. Joe highlights how the technology facilitates sustainability assessments: 鈥淏y simulating energy usage, waste management, and environmental impacts, digital twins allow for more accurate evaluations of a building鈥檚 environmental performance.鈥�

This is particularly valuable for supporting compliance with evolving ESG standards and reporting requirements. Real-time data from digital twins can help track and analyse a building鈥檚 performance against sustainability benchmarks, ensuring that buildings meet or exceed regulatory requirements.

Joe adds: 鈥淒igital twins help move sustainability efforts beyond compliance. They create a continuous feedback loop, allowing investors and managers to monitor and adjust a building鈥檚 performance to optimise for both environmental and financial outcomes.鈥�

The future of commercial real estate: enhanced asset lifecycle management

The benefits of digital twins aren鈥檛 limited to improving current property performance; as technology continues to evolve, digital twins will play an increasingly critical role in asset lifecycle management. They can predict maintenance needs, identify potential risks before they arise, and reduce operational costs over time.

鈥淒igital twins have the potential to radically change how we manage assets,鈥� Joe concludes. 鈥淏y giving us a better understanding of an asset鈥檚 needs and performance, we can reduce risks, improve asset efficiency, and ultimately drive long-term value.鈥�

As the real estate industry moves towards more data-driven, sustainable practices, it is becoming increasingly important to understand how integrating this type of technology can add value.

How can we help?

To learn more about how digital twin technology can impact your strategic decision making, get in touch with our Valuations & Advisory team, or to discuss your sustainability strategy, contact our ESG Consulting team.