Developers: Brace Yourself For Huge Digital Connectivity Overhaul

The need for broadband speed in large buildings is well documented as more and more tenants clamour for fast, reliable and stable internet services, whether residential or commercial.

But until recently broadband quality has been side-lined as an issue and while countries such as France and Germany have invested heavily in digital connectivity, many areas of the UK still offer extremely poor internet reliability and speeds.

This is despite research by Radius that suggests many commercial property tenants consider it to be one of the three most important issues when considering a tenancy, often picking connectivity over location and crucially for developers and landlords, being happy to pay a 5% rent premium.

It is clear, therefore, that broadband is becoming a key factor in the property development and management world.

At a glance…

  • Digital connectivity is already becoming hugely important to commercial and residential tenants.
  • WiredScore has already certified over 700 buildings across the UK.
  • Too many developers leave it until the last moment to think about internet/broadband speeds within their buildings.

But until 2015 there was no-one playing a central role in ensuring buildings offered good digital connectivity, coordinating minimum standards and directing the disparate pieces of the broadband puzzle including developers, landlords, tenants, broadband providers and installers.

And then that year US firm WiredScore arrived. It had been started up two years beforehand in New York with the support of then mayor Michael Bloomberg and tasked with improving the city’s technological infrastructure, with plans to roll out its model across the world.

WireScore picked a good time to find new markets. Competition among European cities to be the continent’s ‘digital hub’ has been intense for some time, and WireScore realised it had a solution.

London win

The company subsequently won the bid to provide the Mayor of London’s Digital Connectivity Rating Scheme, and has since played a key role in improving London’s technological infrastructure.

It has so far certified over 70 million sq ft of commercial property in the UK and works with over 200 clients and over 700 buildings. Its certification process is also embedded in the planning process and for example it is now a mandatory requirement in the City of London’s draft plan.

The company also helps developers work on their digital plan for a building in the early stages of planning but also support landlords of existing buildings to deal with poor connectivity issues.

WiredScore has told DealMakerz that approximately 70% of the buildings it works on improve their connectivity over time.

Residential broadband

But WiredScore has now chosen London to launch its move into residential buildings and apply its model to build-to-rent or BTR.

Some 4,500 units will soon be WiredScore certified which is approximately 11% of the current BTR tally in the UK, and the company is working with several high-profile players within the sector including Legal & General, Long Harbour, Argent and LaSalle.

The opportunity for BTR is clear. Tenants in the private rental market often pay high prices for their broadband but get a patchy service, so to lure them into BTR developments, digital connectivity is all important.

“I think from a BTR perspective it’s important to realise how intertwined both the home and office has become and what you see particularly in BTR spaces are more and more co-working areas within the developments,” says Henry Pethybridge, Head of Home at WiredScore UK.

“And because so many people are working from home now, they expect to have the same level of connectivity as they do in the office.”

Poor connectivity

Research by WiredScore also revealed how bad broadband is in traditional rental properties; 85% of the tenants it canvassed said they’d experienced problems with their internet recently, an extraordinary number for a service which is regarded as a utility in the UK.

This offers BTR an immense opportunity within the market and Pethybridge says he’s seen a lot of BTR landlords buy into connectivity not just as a utility but also an amenity that they can go out and sell.

“The UK still has some way to go – when I speak to some of the landlords about what amenities they are planning on putting into a building they talk about gyms and swimming pools and yet at best 20% of residents will ever use them,” he says.

“And yet good broadband is something that all the tenants in a building will use on a daily basis, so it’s a much more effective way of attracting people to rent a property within a development.

“Our job is to help landlords and developers make all the technical side of connectivity relevant to tenants in marketing terms; most renters don’t care about WIFI mapping, duct infrastructure or telecom rooms – they want to know if they can watch Netflix uninterrupted and use it in every room.”

Planning connectivity has its challenges, partly because the technology is changing.

5G challenge

For example, the imminent arrival of widely-available 5G mobile is one of them, which in effect will be a rival to broadband offering film downloads in seven seconds rather than 7 minutes.

“Because the 5G signal travels at a higher frequency, the shorter waves struggle to penetrate walls and glass as easily as 4G,” says Pethybridge.

“So buildings that have an issue with mobile coverage are going to have even more of an issue when 5G comes in, and landlords need to start planning for that now, and that’s something we’re trying to make them think about.”

WiredScore is also attempting to persuade developers of both office and BTR developments to start thinking about connectivity, admitting that many approach it as an after thought and only engage with the subject two or three months before a development launches.

“If you’re investing in a building that’s going to provide 600 homes in an urban environment over the next ten years then you need to think about how far we’ve travelled since 2007 when five Mbps was considered adequate,” says Pethybridge

“Today many developments are offering 40 Mbps as a minimum service level and some offer 100 Mbps, so you can see where this is all going.”

WiredScore says consumers are waking up to how important good broadband and politicians are following suit – for example Matt Hancock, Minister of State of Digital Culture, Media and Sport launched the company’s BTR initiative. Developer and landlords, if WiredScore gets its way, will soon be following suit.

How does WiredScore work?

WiredScore is now in six countries and hopes to roll out its BTR service across these territories soon, which as well as the US and UK includes France, Canada, Germany and Ireland. It offers free consultancy to developers and builders, and considers itself a certification body, charging to complete this for both buildings under construction and those which are already occupied, based on an Olympics-style ‘silver’ and ‘gold’ ratings system.

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