Posted: 09/07/2025
In June 2025, as part of London Tech Week, Penningtons Manches Cooper and Tech London Advocates' PropTech working group hosted an insightful and forward-thinking roundtable event titled 'The smart building data dilemma: navigating tenant trust and tech integration in 2025'.
This senior-level gathering brought together leaders from across the real estate and proptech sectors to critically explore and candidly discuss the nuanced issues surrounding smart technology implementation in commercial real estate.
Amid ongoing industry hype around proptech innovation, this roundtable served as a platform for addressing the significant yet often overlooked challenges and opportunities of smart building integration.
The discussions were structured around three central themes: cultural barriers in adopting proptech, financial implications and incentives, and complexities surrounding data ownership and technological integration.
The integration of advanced technologies into traditional real estate practices uncovered pronounced cultural tensions. Attendees highlighted multiple procurement challenges, notably that technology acquisition processes in the UK real estate sector remain largely unchanged from decades-old practices, inhibiting effective innovation. This contrasted sharply with more agile and adaptive approaches found in other markets when looking internationally, where rapid integration and adoption of smart technologies have become the norm.
Participants also discussed how those involved in real estate frequently possess extensive technology solutions and data but often fail to understand how to leverage these effectively. One contributing factor identified was unclear accountability structures and fragmented ownership of technology initiatives within companies. Attendees noted that this creates significant barriers to realising the full potential of technological investments.
An overarching observation was the general absence of clear mandates within organisations to drive and manage technology implementation actively, particularly at a senior level. This lack of clarity and ownership has resulted in disjointed, siloed efforts, limiting the realisation of potential benefits that smart technologies promise.
The second theme explored the complex financial considerations around investing in smart building technologies, particularly focusing on the question of who bears the costs and who ultimately benefits.
Traditionally, capital expenditures for improvements have been challenging for landlords to recover via service charges, as these costs are not always directly transferable to tenants. This creates a disincentive for landlords to invest unless it can clearly be shown to increase property values or rental income over the long term. As the market evolves with service charge caps and inclusive rental models, landlords face additional pressures, potentially reducing their margins and complicating investment decisions.
From the managed office space viewpoint, the evolving expectations from tenants were highlighted, particularly small operators, who increasingly expect comprehensive bundled services. Post-pandemic, tenants have become more discerning, questioning services such as HVAC systems and utility costs. With average stays around 30 months, there is anxiety about investing significantly in technologies that might rapidly become obsolete, compounded by limitations on passing these costs directly to tenants. Shorter leases also require a careful balance between investment in technology and maintaining profitability, as improvements must quickly translate into demonstrable benefits to attract and retain tenants.
The importance of transparency around energy costs was also emphasised, advocating clear communication to tenants rather than obscuring costs within bundled rates. A more open approach could be taken, with landlords potentially being more explicit about how they present energy and technology costs, enabling tenants to better understand and value the services provided.
The discussions underscored a crucial need for landlords and tenants to collaborate on technology investments, ensuring shared incentives and clear communication around costs. The conversations highlighted how critical financial transparency, robust justification for investments, and aligned incentives between tenants and landlords will become increasingly essential to successful smart technology integration.
Ben Law, real estate partner at Penningtons Manches Cooper, noted that the commercial real estate sector is at a tipping point where smart technology is becoming a strategic necessity. Yet, without clear alignment between landlords, tenants, and investors on cost-sharing and ROI, adoption will remain patchy. The key lies in reframing proptech not just as a cost, but as a value driver—enhancing tenant experience, sustainability credentials, and long-term asset performance.
Mark Jenkinson, co-lead of Tech London Advocates PropTech and director of Crystal Associates, noted that the supply of energy is being taken for granted by both landlords and occupiers. Recent high-profile outages at home and abroad demonstrate that the grid capacity is finite and sometimes unreliable and logically that most buildings cannot operate without power. How would your organisation function without electricity for a day or even a week? Improving the energy efficiency of buildings can help to reduce the reliance on the grid and also impact positively on decarbonisation plans. The right proptech can help to provide the right data and thus transparency to aid better investment decisions and result in a win-win for both landlords and occupiers.
Data ownership emerged as one of the most contentious and complex topics of the day. With increasing recognition of data as a valuable asset, questions around privacy, ownership, and monetisation were also core themes.
The roundtable highlighted the urgent need for interoperable platforms that allow for seamless data integration across multiple systems. Universities and large multi-tenanted commercial buildings were cited as prime examples of institutions struggling with fragmented data access, opaque management systems, and significant integration challenges. This fragmentation not only complicates operations but also impedes real-time decision-making capabilities.
Oliver Kidd, commercial partner at Penningtons Manches Cooper, stated that as smart building ecosystems become increasingly multi-vendor and data-driven, the legal and operational frameworks underpinning them must evolve. From procurement through to integration, organisations need robust, future-proofed contracts that clearly define responsibilities, data ownership, and interoperability standards. Without this, the risk of fragmentation and underperformance grows exponentially.
It was also noted that the lack of accessible real-time data significantly complicates environmental and sustainability planning, as tenants increasingly require comprehensive sustainability credentials. There is a growing need for open, interoperable platforms to facilitate effective data utilisation and sustainable building management.
Jonathan King, chief operating officer at Penningtons Manches Cooper, stressed the importance of elevating the discourse on data beyond facilities management, advocating for broader organisational involvement, particularly at board level. He went on to emphasise that integrating data-driven insights into broader business strategies, such as employee wellbeing, productivity, and operational efficiency, is crucial to fully realising the potential benefits of smart technology.
In summary, the event underscored the need for innovative procurement strategies, clear financial incentives and senior level ownership within organisations, a more holistic and integrated approach to technology platforms and the valuable data they generate, and a collaborative approach to ensure successful smart building adoption and integration.
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