It’s Time To Transform Our Buildings With Technology
Amel Chadli, Schneider Electric’s Vice President of Strategy and Digital Energy for the Middle East and Africa, explains how technology is transforming the buildings we live in, and the industries that create them.
Where are you right now? The best guess is that you’ll be reading this whilst sat within four walls. Buildings are fundamental to how we all live, and they are where we will spend most of our lifetimes. They are where we work, where we shop, where we study, where we go when we are sick, or when we need a place to stay. That’s why it is more important than ever that the buildings we spend 90% of our lives in are safe, healthy, green, and people-centric—and that they exceed our expectations.
Buildings need to think for themselves, leveraging real-time data to be more responsive, delivering more for less. They need to be hyper-efficient. They need to be sustainable and return resources to our planet, rather than just use them. Resilience is important too; we need buildings to be here for us and shelter us when the unexpected happens, or when we need a place to lay our heads. They also need to provide a healthy and productive work environment so we can keep our economy strong.
Due to the COVID-19 pandemic, transformation of the building
This current reality—climate change, a looming recession, and a global pandemic—is resulting in four key challenges for buildings: Sustainability: Buildings consume about one-third of the world’s energy and account for almost 40% of annual global greenhouse gas emissions. To be sustainable, buildings, both new and retrofit, need to change.
Resiliency: As the number of natural and man-made disasters rise, building owners and operators must adapt continuously to new obstacles during times of crisis that often quickly change business industry has been significantly accelerated. Because these spaces play a crucial role in both economic and environmental health, there’s a critical need to adapt industry practices to be all-digital and all-electric for both existing and new buildings.
priorities, threaten staffing levels, and lower operating budgets. Hyper-efficiency: Advances in technology and IoT-enabled devices are empowering building owners and operators to use big data and AI to greatly lower operating costs and improve productivity by addressing space management, operational efficiency, and occupant experience. People-centricity: Developers must enhance the experience, health, and wellness of building occupants to improve productivity and satisfaction, and benefit from a value-added differentiator.
For many of these issues, technology is the answer. Let’s take operational issues. Over the course of any building’s existence, 20% of total costs relate to construction, and 80% to operation. Broken down further, 40% of a typical budget is spent on energy and 30% on maintenance. Smart building technology can result in significant long-term saving. In fact, the American Council for Energy found a cost saving of 32% when using connected heating, ventilation, and air conditioning (HVAC) and lighting systems.
An example of this is spending on energy. Buildings consume more power than any other resource, accounting for up to 40% of the energy used worldwide. And that percentage could be even higher in the Middle East region, due to how we use air conditioning. With this in mind, the potential for cost-savings is massive. The ability to measure something allows you to manage it, and our technologies help building owners and users gain insight into more than 95% of any building’s energy use.
Facilities management teams can use this information to identify where energy is being wasted and where they can reduce energy consumption. An energy reduction of 5% can result in savings of hundreds of thousands of dollars, benefitting both the environment and operational expenditure. Our own customers have shown that smart buildings offer a return of 10 to one on any technology investment.
This is but a simple example of how technology can improve the way a building operates. Sensors and other connected devices can enable real-time measurement and optimization. The building of the future will become completely flexible and adaptive to a variety of uses, while your office space will become more interactive, agile, and responsive to the needs of employees. Artificial intelligence-enabled tools will predict emerging faults, dynamically optimizing operations to suit the occupant, and choosing between different sources of energy.
Our own buildings are an example of this, and we’ve deployed our own solutions to improve how our offices and employees perform. We’ve deployed our EcoStruxure Workplace Advisor across many of our offices globally. This technology helps to inform long-term real estate decisions, optimize how we use space, improve employee comfort, and enhance productivity, enabling a more flexible and efficient office and homeworking combination.
And buildings can be connected to create smart neighborhoods that amplify the benefits. We’ve linked every large building on the campus of Qatar’s Education City, 42 in all, to give the operations and security teams a single, centralized platform to manage multiple processes, including monitoring and controlling energy usage, and temperature settings. The system provides a unified environment for real-time data acquisition, analysis, and visualization, as well as the integration of various applications.
We can also go beyond this and look to the construction sector itself. We have the technologies today to plan both building construction and operation through digital twins, before laying a single stone. The construction and real estate industries are at a transition point where digital methods and technologies will fundamentally change the traditional approach to analog work.
Technologies, like those offered by RIB Software, bring data and analysis to the construction sector, allowing for enhanced estimation and project cost controls, more powerful KPI monitoring, and optimized construction management hosted in the cloud.
For an age-old industry, we’ve waited long enough to make the most of technology. We have an opportunity to use solutions to make our buildings more efficient, greener, better performing, and better for our health. The only question to ask ourselves is, what are we waiting for?
“An energy reduction of 5% can result in savings of hundreds of thousands of dollars”
Construction, like many other industries around the world, has been adversely affected by the COVID-19 pandemic. How has ALEC managed this period, and what is your short-term outlook as the region begins to recover?
ALEC has operated in the region for over twenty years, which gives us the advantage of having a proven track record of delivery that developers can trust. During the pandemic, this solid reputation enabled us to continue working on an existing pipeline of work without interruption. Certainly, the disruption surrounding supply chains has had a knock-on effect on logistics. However, from a high-level point of view, we’ve continued to focus on the projects at hand and deliver them to the best of our ability.
Notable highlights in the past twelve months include the topping out of both towers on One Za’abeel, that form part of Ithra, Dubai’s iconic luxury development. We also successfully installed a bridge known as The Link, to connect the two towers. At 226 meters in length, it is one of the longest cantilevered structures in the world, and hoisting the 9,500-tonne bridge one hundred meters into the air over a six-lane highway, was a serious feat of engineering. This was only achieved through close collaboration between all stakeholders, while employing some of the latest technologies.
Additional highlights from the past 18 months include our work at Expo 2020, such as the Mobility Pavilion at the Dubai Exhibition Centre, as well as several country pavilions. Here, we worked closely with our subsidiary, ALEC FITOUT, whose passion for culturally immersive encounters features prominently in the Expo visitor experience. Meanwhile, our work on Jumeirah Living Marina Gate and the Dubai Hills Mall has contributed towards the high standards expected from Dubai’s increasingly robust residential real estate market.
Looking ahead, we’re continuing to support the U.A.E’s diversified future, which includes working on projects ranging from entertainment to high-rise buildings, and infrastructure to boutique luxury.
Collaboration and vertical integration have become key trends for many businesses over the past few years, and particularly so in light of the pandemic. What is ALEC’s take on working with other companies or creating subsidiaries that extend the value of its core expertise? Collaboration is a crucial focal point for many stakeholders in the construction industry, particularly where technology is concerned. The best example I can think of is our work with U.S.-based, Holobuilder, whose construction process management software provided a new and unique way for stakeholders on the One Za’abeel project to remain fully informed. Holobuilder’s software also offered the accessibility to crosscheck and compare project progress and renderings, while flagging any issues on the BIM 360 interface. Given the various preventative HSE measures associated with the pandemic, including social distancing and remote working, our collaboration with Holobuilder saved time and protected our staff and labor force by mitigating the risk of infection while on the job site.
In addition, ALEC has been keenly focused on diversifying its holding in terms of verticals, most notably through ALEC FITOUT, ALEC Energy, ALEMCO, ALEC Technologies, and LINQ.
Ultimately the construction industry is universally moving away from traditional methods towards off-site manufacturing and with LINQ, we are at the forefront of this trend. LINQ is a related business we are particularly proud of, as I believe it represents a cornerstone in the future of sustainable construction. LINQ is a modular housing solution that focuses on eliminating waste while enhancing energy efficiency. By capitalizing on the extensive knowledge and expertise provided by ALEC, LINQ has been carefully designed using BIM software, meaning each structure only uses the required amount of material with a minimal amount of waste. Added to the machine-based production, LINQ can reduce the amount of waste typically associated with home construction from 10 to 15% down to just 2%, while increasing the speed of onsite construction by as much as half.
As a Dubai-based company, how is ALEC seeking to expand its footprint in the GCC and beyond?
ALEC has, for several years, worked on international projects in Ethiopia, Oman, and Qatar, and thanks to its associated businesses, we will soon start operating in the United Kingdom. Our experience to date has been based on demand from international developers who’ve seen the quality of our work in the U.A.E and wish to replicate it in other countries. Based on this success, ALEC is establishing a full-time presence in Saudi Arabia, with ALEC FITOUT doing the same in Egypt. Meanwhile, we are currently in the process of repeat contractual work in both Qatar and Ethiopia.
ALEC is one of the core contractors at the heart of Dubai Expo 2020 – how do you think visitors will receive the overall experience, and how will it add to Dubai’s legacy?
ALEC and its subsidiaries were honoured to win work on over 15 Expo 2020 pavilions, ranging from turnkey construction to MEP, and fully immersive experiences. People will be amazed at what’s on show and will find some of the creative aspects of each pavilion genuinely memorable. Similarly, for Dubai as a city, the Expo experience has been designed to educate, inspire, and show what is possible when talented people collectively pool their resources to accomplish something greater than their constituent parts. Expo 2020 will undoubtedly enhance Dubai’s legacy as a center for innovation and will likely attract more people to become a part of its community.
“Hoisting the 9,500-tonne bridge one hundred meters into the air over a six-lane highway, was a serious feat of engineering.”
The U.A.E.
Growth in the U.A.E.’s construction output was forecast to contract by 4.8% in 2020, with a rebound in 2021 of 3.1%, according to GlobalData. The Dubai market specifically has been impacted by oversupply and decreasing prices, with the pandemic exacerbating those challenges as its expatriate population decreases.
Perhaps one of the biggest examples of the impact of those challenges was regional construction giant Arabtec’s filing for liquidation. It came after the group posted a net loss of $216 million for the first six months of 2020 and total accumulated losses of $397 million.
Last year, Drake & Scull International also made a string of new appointments, including to the positions of CEO and CFO, as part of its corporate and debt restructuring. A couple of months later, the company announced that it would focus on closing out existing projocts and refocusing on its core business activitates in order to win new projects as it reported accumulated losses of $1.3 billion as of September 2020. Meanwhile, Australia’s CIMIC Group exited the Middle East market by selling its 45% stake in Dubaibased BICC Contracting.
However, the government has been making efforts to reduce burdens on the sector. In late 2020, the Dubai Executive Council approved new building codes that are set to reduce construction costs by streamlining rules. This will be achieved by creating a one-stop shop for obtaining approval from Dubai’s licensing agencies and departments, easing procedures for consultants, contractors, developers, investors, and owners. State-owned Abu Dhabi National Oil Company’s decision to invest more than $43.6 billion in the U.A.E. in the next five years is also set to help the sector recover.
Saudi Arabia
Construction output in Saudi Arabia, the region’s largest projects market, was expected to contract by 1.9% in 2020, with a forecast recovery of 3.3% in 2021, according to GlobalData. In an effort to diversify away from oil, the kingdom is planning to invest approximately $1 trillion in the country’s nonhydrocarbon sector by 2030. This includes key construction and infrastructure projects such as NEOM, the Red Sea Project, Qiddiya Entertainment City, the King Abdullah Financial District, and the Sakani housing project. Large-scale projects in the kingdom are expected to be supported by the Public Investment Fund, with the sovereign wealth fund set to invest a minimum of $40 billion annually in domestic projects through its fiveyear strategy program.
The kingdom has also focused on adopting technology, with approximately $2 million in seed funding allocated to home maintenance services startups such as B8ak, FalconViz, Ajeer, and Muqawiloon.
“Construction output in Saudi Arabia, the region’s largest projects market, was expected to contract by 1.9% in 2020, with a forecast recovery of 3.3% in 2021, according to GlobalData.”
Other GCC states
Other GCC states were also not immune to the effects of reduced oil prices and widening budget deficits. Oman’s state-run companies were asked to cease all new projects and cut expenditures by 10%, while Bahrain cut 30%. In April 2020, Qatar announced it would postpone $8.2 billion worth of unawarded projects.
Construction output growth in 2020 was forecast to be -10.3% and -4.5% for Oman and Qatar, respectively, according to GlobalData. However, 2021’s outlook for Qatar looks promising after the lifting of the Qatar blockade, with the move likely to increase competition and revive dormant supply chains, according to global law firm Clyde & Co. The introduction of the Public Private Partnerships law in 2020 is expected to encourage the private sector to develop the local economy.
Meanwhile, Kuwait’s construction output growth was forecast to be -9.5%, as the country faced issues such as delays in the introduction of VAT, limiting government spending, and temporary suspension of work. The sector has suffered from weakness in energy and civil engineering work, according to MarketResearch.com.
Egypt
The most populated country in the region, Egypt is one of the few Arab countries with a construction sector that recorded positive growth in 2020, albeit at a slower rate than 2019. In December, GlobalData forecast a 7.7% output growth in 2020, with an expected growth of 8.9% in 2021.
Some construction giants suffered losses. For example, Orascom Construction’s net income fell 35% to $97.1 million in 2020. However, Egypt still outperformed its regional peers mainly due to high population growth, fierce competition, and strong government spending.
According to Egypt’s planning ministry, the construction sector is expected to recover quickly and is the sector most likely to benefit from government spending. The sector is still gaining momentum with several projects still pressing ahead, especially in the New Administrative Capital. Numerous governmentfunded infrastructure projects are set to continue too.
Egypt has also placed its focus on sustainability, offering $750 million for a five-year maturity in the region’s first green bond offering. The issuance was nearly five times oversubscribed, which reflected strong investor confidence.
Key to change
The Middle East’s construction sector and infrastructure growth were already facing challenges pre-pandemic. Today, with a new set of trials facing the industry, experts are recommending attracting private sector investment, specifically from China, and improving productivity through greater use of technology. And according to PwC’s 2020 Middle East Capital Projects and Infrastructure Survey, other key measures include building digitized infrastructure to boost efficiency and improving supply chain transparency.
“The most populated country in the region, Egypt is one of the few Arab countries with a construction sector that recorded positive growth in 2020, despite a slower rate than 2019.”