Housed: The Shared Living Podcast
Sarah Canning and Deenie Lee of The Property Marketing Strategists have teamed up with Daniel Smith of Student Housing Consultancy to discuss the latest news, views and insights in the shared living sector.
Each episode they will be delving into a wide variety of subjects and asking the questions which aren't often asked.
This podcast is a must for anyone working in Student Accommodation, BTR, Co-Living, Operational Real Estate or Shared Living.
Housed: The Shared Living Podcast
Data-Driven Sustainability in Shared Living: The Utopi Story with special guest Jonathan Burridge
Latest Housed episode with special guest Jonathan Burridge, Co-Founder and CEO of Utopi.
Sarah, Dan and Deenie are joined by Jonathan to discuss digital solutions to sustainability in shared living, the key themes covered in this episode include:
Smart buildings aren't just collecting data—they're transforming how we live. In this compelling conversation with Jonathan Burridge, CEO and founder of Utopi, we explore the revolutionary intersection of technology, sustainability, and human behaviour in residential real estate.
From its inception in 2019, Utopi has evolved from a simple technology solution to a comprehensive platform that helps property owners and operators leverage data to drive meaningful change. Jonathan shares how their journey has been shaped by market realities, client feedback, and global events like COVID-19, resulting in a product that delivers tangible value in today's challenging property landscape.
The revelations about resident behaviour are particularly fascinating. Jonathan describes discovering a 1400% variation in energy consumption between identical studio apartments under the same conditions—a stark illustration of how human choices dramatically impact building performance. This data-driven approach has allowed Utopi to develop effective strategies for both passive controls and active engagement campaigns like "Progress to Pizza," which successfully motivated students to reduce their room temperatures.
We dive deep into the evolution of ESG from compliance exercise to value driver. As Jonathan explains, "Most of the money in the market is saying we want green assets," creating a compelling commercial case for sustainability investments. The discussion explores how high-performing sustainable buildings attract more capital, potentially commanding better prices while avoiding the "brown discount" applied to underperforming properties during transactions.
The conversation offers candid insights into the challenges of running a tech company in the traditionally slow-moving real estate sector—what Jonathan describes as "running a sprint while real estate runs a marathon." Yet despite these challenges, the fundamental case for smart building technology remains strong, particularly as energy markets face continued volatility and sustainability requirements intensify.
Ready to discover how smart building technology is reshaping the future of residential property? Listen now and learn how data is becoming the key to unlocking value for people, planet, and profit.
Thank you to our season four sponsors:
MyStudentHalls - Find your ideal student accommodation across the UK.
Utopi - The smart building platform helping real estate owners protect the value of their assets.
Washstation - Leading provider of laundry solutions for Communal and Campus living throughout the UK and Ireland.
Hello everyone and welcome back to Housed, the shared living podcast. This is the eighth episode in season four and we're very grateful that you've been listening in your hundreds to this brand new season. Now that doesn't sound like a lot, does it? But when you think that we get between sort of 350 and 500 listeners per episode, well, it's like having a packed audience at Property Week or LD events or any of the other events as well, listening to you on stage for half an hour week. Okay, a little bit more than half an hour. It's an opportunity for us to talk about the issues and the insights of the moment in student accommodation, btr, co-living, hmo and later living. It's also a great spotlight for our sponsors. I'm Dan Smith from Resi Consultancy.
Speaker 2:I'm Sarah Canning for the Property Marketing Strategists.
Speaker 3:I'm Dini Lee from the Property Marketing Strategists.
Speaker 4:And I'm Dini Lee from the Property.
Speaker 1:Marketing Strategists and I'm, jonathan Burridge, ceo and co-founder at Utopia.
Speaker 3:And now a word from our headline sponsor. Season four of Housed is sponsored by mystudenthallscom. List your properties commission free and reach thousands of students searching for their university home.
Speaker 1:Now, if you listen to this and you're not listed on my Student Halls, you are missing leads for your properties. We all know firsthand and we've seen our clients benefit from spotlights and listing for the first time as well. Mystudenthallscom is easy for students to search and easy for operators to list, so if you haven't already, make sure you get in touch with Dan and the team. Also, a huge thank you to our brand new sponsors, wash Station. More from them later, but today is a very special episode. We are speaking to Jonathan.
Speaker 4:Burridge, the CEO and the founder of Utopia. Welcome, Jonathan Hi Dan Hi Sarah Hi Dini. Real pleasure to be involved today. Good to see you all.
Speaker 1:Thanks very much and thanks for joining us Now. First things first. What is Utopia and what does it offer to owners or operators of residential properties?
Speaker 4:Yeah. So at Utopia we are here to help asset owners and operators leverage the value in technology and operational practices. So we've built a software hardware combined product which is designed really to be implemented either in existing or new assets to help with ESG and sustainability issues and opportunities, at the same time as helping our operational teams use data to become more efficient in their operational practices. And also that same data set can be used to help educate and change behaviors in the way that people live and operate within these buildings as well. It's a really good question and the journey that we've been on since 2019, when we launched we set out to solve a macro problem.
Speaker 4:I think at that time it was more about helping make technology available to real estate in a more coherent and easy to consume way. And of course you know, with any plan it makes contact with reality and then you learn all the things that you didn't know, um, and then you know introducing to that makes uh covid and the fact that the whole world changed six months into our journey. We've kind of iterated ultimately into the place that we're in today just through course correction and learning and listening and evolving the technology as as the whole world has been evolving alongside our business. So you know, nearly six years in, it's almost unrecognisable what we do today to what we started out with as a plan and, I think, helpfully. Along that journey we've met some amazing people who've been really open with the challenges that are faced within real estate, specifically within student housing, and that's helped us really get to a place today where we feel we've got real value to add.
Speaker 1:So I remember when we first spoke Jonathan, it was fairly early on actually in your journey with Utopia and I saw the huge potential because I was doing a lot of work with operators on their ESG at the time and it was sort of bridging the gaps between, you know, operations and ESG within property management. It was primarily focused on behaviour change at the time. So how has it evolved and how have you sort of pushed it along on that journey? Has it been sort of reactive to what investors or residents want? How's?
Speaker 4:that journey been. It's been an education, to be honest, the whole way through. So I think initially, when we launched the product in 2021, at the end of the year to september onwards the first heating season, if you like that our product was installed in buildings. We we were working really with an asset owner mandate at that point so we hadn't really engaged in the way that we have since with operators. So a very much a top-down mandate. Let's get some data from these buildings. We can use it to satisfy our esg reporting, you know, but also we'll start to understand patterns of behavior within spaces that we can then look to try and change to help our P&L ultimately increase in NOI. So that was where the journey started for us and then, over time, when we started to see how, operationally, we could then make use of this data set or it could be used by the operational teams, we then went on a really steep learning curve around how we you know how we engage with what are already very busy teams in an operational context.
Speaker 4:So I think initially it was a top down mandate from investment funds.
Speaker 4:Let's get some data, let's add some value from a green credentials perspective and then hopefully we'll find the ROI that comes off the back of that, through behavioral change, running campaigns, you know, making interventions on a kind of manual basis, operationally, and then over time we recognize that whilst that is an effective way of delivering savings and we've been able to measure and demonstrate that impact over the last three or four years we've also now evolved into a place where we have the kind of option of what we call active and passive.
Speaker 4:So, active being, we're going to do something with the data, the operating teams that have got time and energy and want to commit to a sustainability-based living environment for their residents. But there's others that are just under-resourced bigger schemes, different demographic but perhaps don't have the time, so they just want passive controls in place. So over time, what we've done is we've released new technologies and features and capabilities that have allowed us to really adapt the product to fit operationally into this industry, and all of our energy is in building out on those features and products that we've currently got in place today.
Speaker 3:That's great and having that data is so powerful. I remember when years ago in the sector, when everyone was still talking about CSR and I was asked to write a CSR strategy, and I was like, yeah, ok, so tell me about your data usage though I don't know about that and obviously it's great. You know, we always talk about data and tech and there's not often enough of it in this sector, but you do have a lot of data and you are collecting that data, but what are you finding from that data that students actually really care about in the building?
Speaker 4:I mean what the students care about. I think we've still got some way to get to a place where students really care about the data that's available but where we have been able to run campaign-based activity across schemes where the students have engaged. They love the fact that they're being educated on the subject that they otherwise perhaps wouldn't have thought about in their first you know, venture out of home, into a living environment. So you know, we've all been at that point in our lives when you know we didn't really know what a kilowatt of energy was, or you know a gram of carbon emissions, and frankly, why would you? You know, if you're not paying the bill and you don't, there's no impact on you on a personal level, but there is a high degree of climate concern and a kind of pent up climate action, energy that's within young communities these days and it's really important that we help feed into that. So, while we have been able to kind of simplify the data and translate that into a, you know, a campaign that perhaps encourages an average temperature reduction across the scheme, for example, you know, when it's as simple as measuring, you know, degree Celsius, rather than complicating it with other things, actually it's quite easy to engage with and then be able to show the impact that those actions that these young people have taken has on the environment and also, you know, on their futures, then we've seen some really great interaction and some great results driven at that level as well. So, but we still feel that that whole behavioral change and gamification play is still well in its infancy. There's still lots to do there. We've learned a lot over the last two or three years around.
Speaker 4:Just being able to engage on a digital basis with these communities is a challenge. A lot of schemes don't have apps, or if they do have an app, then maybe the uptake isn't there or it's being used for one or two specific features where there's a more rich community experience. What we found is we can get further reach and then our data can have more impact. So that's definitely been a journey for us. In the meantime, we're driving savings in other ways.
Speaker 4:It's more about, you know, one-to-one communications. So knock on the door if did you realize that your average temperature is sitting at 30 degrees and it has been for the last two weeks and your energy consumption as a result is significantly higher than your peers in the building. Those conversations do have an impact and it's all about OK, I didn't realize, how do I, how do I do something about that? Students will engage and then we're educated. So what we want to do is turn that kind of manual intervention into a digital intervention and do that scale of manual intervention into a digital intervention and do that scale and I think then we'll have a bigger impact. Number one, but we'll also be able to educate more young people on how they can live more sustainable lives, which is, you know, for the greater good of the planet ultimately in the long run. So something that we're really passionate about. But it's a journey and we haven't we haven't fully solved that aspect of it, and that's where the heating controls has really helped us kind of intervene in the meantime, really.
Speaker 2:So would you agree or disagree with the statement that young people don't care about the environment?
Speaker 4:I would disagree with that. Actually, I think they do. I think the challenge is not knowing what to do. That's the issue. I think there's a there's a high level, like I say, of climate awareness or climate consciousness, and people are aware that something needs to happen, but how do you know what to do if you haven't been educated in that subject or you haven't been in that living environment, and I think that's important that we, as the older generations as I definitely now am we've got an obligation to you know, to help young people understand the actions that they take and how they could be addressed or adjusted to have a more kind of sustainable future for everybody involved. Ultimately, though, we're still going to have the challenge that people don't pay the I mean in the UK and European student market. Ultimately, they're not paying the bill, so there's no financial incentive there unless you reward, which is an option which we've seen some success with, that in some of the projects that we've delivered.
Speaker 1:Really, the financial incentive is on the operator, and, you know, at the operator and asset owners of their ultimate benefit I think this is where there's such an opportunity here for for operators in particular, because, firstly, they're doing the right thing like this ultimately will lead to behavior change and improve the sustainability of various residents lifestyles and and I think that's such an opportunity but the cost savings are very much there as well. Just on the gamification side of things, how is it that Utopia is gamifying energy usage and sustainability?
Speaker 4:Yeah. So the way we've been doing that is. There's two different strategies that an operator can adopt. If there isn't a digital comms channel open with individual students in their living environment ie they don't have an app or there's no kind of digital comms channel there that's established, then the best way to do that is at scheme level. So use activation workshops, you know, do lots of kind of on-site marketing and branding with lots of content that we've created, qr codes that take you to specific websites. You know all sorts of things that are really really helpful to activate a campaign at a scheme level. That's been helping.
Speaker 4:You know we've got some great examples actually where we've driven, you know, significant savings just at a scheme level by having that kind of level of campaign activity. That can also then spin off into these sort of manual interventions. So, knocking on the door, have the conversation. You know we call it outlier management. Once you understand the top 20, you know they're usually where most of the energy waste is anyway in the scheme. So they're the ones to go and target 20 is a manageable number. We're not talking about in a scheme of, you know, 500 students or whatever. It's just it's still a manageable component of the of the overall community. Um, so on, a kind of you know, without the digital channel, that's the route to gamification and you know it's less gamification and more education. In that scenario, the gamification you could argue where you do things like the campaigns that we've run progress to pizza, which is a campaign run at a site you remember the one, dan um, that was really successful. We encourage the students to reduce their average temperature from 24 to 22 degrees celsius in the bedrooms. They did that within a few weeks and they celebrated with a pizza party. So really simple, but a great way of engaging the community, getting people thinking about it, and it had an impact, measurable impact that we were able to to share with them we we discussed with with ben and from utopi on our youth forum webinar a few weeks ago.
Speaker 2:We got into quite a interesting debate really about. You know, can you see an end to all inclusive bills? Is that the only way that we can make significant changes with behaviour changes? But also, you know, genuinely you know if the sector really has sustainability values? You know, is that the only way really that they're going to shift the dial? What's your thoughts on that, johnston?
Speaker 4:I mean, I guess being ready for that eventuality is a good idea, right, because the market could shift quickly and then you want to be, as an operator, in the best position to move with the market if that happens.
Speaker 4:So putting the right infrastructure in the building is a really good idea. You know, we've we've rolled out lots of submetering and schemes for that reason, to prepare our clients for that eventuality. I think, if I step back from that and look at this through a different lens, I think actually the danger here is if we go to an all-inclusive, so from all-inclusive into a bills excluded model, and the demographic is not concerned about finances because they are already, you know, wealthy, they've got well-funded backgrounds, families that are paying for, and we've heard, you know, we've all heard about experiences with, you know, some domestic, some overseas students who don't really understand the value of money necessarily at this stage in their lives. The danger in going bills on top and expecting to see an impact is that they don't care and therefore they just pay and then there's nobody really financially motivated to make that change.
Speaker 4:And I do think with for me anyway, with the whole thing around you know, being able to deliver the road to net zero to reduce consumption and emissions. That whole journey has to align to commercial objectives, because it's the only that's the unlock right. No one's going to spend tens of billions of dollars or pounds on infrastructure or transitioning to net zero unless there's a financial objective attached to it. And what we've seen in the money markets, if you like, that support this asset class, you can already see that is starting to take shape, in that most of the new money coming into the sector has a high degree of, you know, a high bar, if you like, in terms of ESG reporting and accreditation and a lower acceptance of a brown risk, which is kind of where we've been being really honest. So I think if you go to the excluded model, the danger is a lot of people really don't care and then there's nobody motivated to make change. So there's an element from the planet perspective that I would say I discourage it.
Speaker 4:Actually, it makes financial sense, if you're an operator, to think about this. We've got geopolitical backdrop today which, even in the last couple of days, has increased the risk of a volatility again back into the energy markets and, if you know, if we do see what happened two years ago come into fruition again and we've got, you know, two or three x cost in a very significant line within the pnl. That has a meaningful impact on the profitability of the scheme and therefore the value of the asset. So I think we've got to be prepared for that eventuality, this fluctuation in energy markets. So that's where it makes sense to be ready for that and if the move needs to be to push it on the student ultimately as part of their cost base, then it gives them the flexibility to do that.
Speaker 1:But I think that does come at a cost to the planet, because I don't think that students will necessarily care not all of them, but some. I agree with you that splitting the bills does worry me the energy poverty side of things. You know students actually then wanting to go for accommodation because it's more affordable, because you've split the bills out, but then realizing that actually there's a significant amount extra to go on top of those bills go, go on top of that rent in the bills and, like you said, that volatility that we're seeing at the moment. That's going to be, I think, quite a challenge for the sector and for residents to grapple with, in particular, in particular those students that are well used to it being included. On the data front again, do you typically Do you get surprised by some of the data that you're pulling in, and I'm thinking about the context, what we've just talked about there.
Speaker 1:Students don't necessarily care about sustainability that's not necessarily true across the board, but is it? Are there sort of stereotypes that are lived up to? Do international students therefore use more heating, etc. What are the sort of surprising bits of data or the, I suppose, the ones that reaffirm your opinions that you've seen?
Speaker 4:I mean it's fair to say that overseas students, depending on where they are from, prefer warmer living spaces. I think that's fair to say that overseas students, depending on where they are from, prefer warmer living spaces. I think that's fair to say and not not hugely unexpected either. The challenge with that obviously, is if you start heating a room beyond 22 degrees celsius, it costs a lot of money for every one degree of celsius that you go above that 22 threshold, which is a comfortable living environment. Let's be honest. I mean, most of us probably would be comfortable at 20 degrees or something, maybe even 19. So I think we have definitely seen some stereotypes occur as a result of that, which I'm really careful about how we project that message, because ultimately we don't know, because our the data that we collect is anonymized and it is fully gdpr compliant. Therefore, we don't know what the demographic in a scheme is. That's for someone else to concern themselves with.
Speaker 4:But we have seen huge variations in the way that spaces are utilized by different students.
Speaker 4:So we don't know what those student differences are age, you know, section, you know sex or whatever else. So but what we, what we have seen is a variation of 1400 percent in the same data set, sample set of data, where, where we had, you know, right back in 2021, first heating season 11 apartments, all stacked studios, all stacked on top of each other Dan, you've heard me say this many times before all with the same number of heaters, same number of occupied days, same number of students, same time of year, same weather conditions. So a great sample set of data and we've seen a variation in consumption in that sample set, from 600 kilowatt hours through the heating season all the way up to, you know, nine and a half thousand kilowatt hours in that same measured period. So huge variations and it is down to the user and and you know how they live in the space and whether they really understand how to use the heating systems and or whether they care or not. I guess is the worst case scenario for me.
Speaker 3:I guess, is the sector doing enough with all that data? Like what you just talked through, there is an amazing amount of data and amazing amount of knowledge that can really have an impact on how they operate the building, the cost of the building, how they engage with their residents. Is the sector kind of harnessing that enough and using that enough?
Speaker 4:It's a good question and I guess the answer is no, but I want to ask the question upon me why is that? And is the product designed to make that easy? So we're constantly challenging ourselves with how can we make our products more operator friendly, how can we create insights that are actionable, that don't take too much time or resource away from the main job on site, which is nothing to do with what we're talking about today resource away from the main job on site, which is nothing to do with what we're talking about today. So we've spent a lot of time, especially in the last six months or so, just trying to really understand how can we simplify and how can we use different ways, different techniques to get the data into the hands of the operational team so that they do care and they can take action without it taking vast amounts of time away from their operational day-to-day role. So that's something that I think is true to say that the data isn't being used to the extent it could be in every scheme.
Speaker 4:We have seen great examples, by the way, where some operational teams have gone from day one I mean, I would embarrass the people so I won't name them, but they'll know who they are A top-down mandate from an operational lead someone who's very active in the industry and well-known from an operational lead, somebody who's very active in the industry and well-known to his team, who were also very active at an operational level, who then, from day one, had practices aligned to making use of the data and therefore were able to drive value from it.
Speaker 4:So we've seen great examples like that, but we also accept that that's not always straightforward. So if you've got a global operational brand with tens of thousands of beds, how do you get that top-down mandate to find its way to the site team? But what we've got to do is we've got to educate them from our perspective and then make the toolkit really easy to use. So that's what we've been focused on, you know, pretty heavily over the last um, like I said, six months in particular. But last couple of years we've been working hard on understanding the operator landscape better so we can help more I?
Speaker 2:I have a really loaded question, Jonathan. How many marketeers in organisations are you dealing with? Or is it a very operational-based relationship? Because just thinking about all of that amazing data that you've got and how that behavioural change can be communicated, it seems like a no-brainer that that's a marketing and communications role within a business. But are you having those conversations? Do you have those relationships as a business?
Speaker 4:Yeah, it's interesting. So we do have some really strong relationships with the marketeers at the operational brands that we work with. Usually when we run sort of extensive campaign activity you know things like the Progress to Pizza, the Grinch campaign that we ran with one of our clients these campaigns needed a high degree of impact and input from the operational marketing teams. But I wouldn't say that's necessarily a feature across all of our customers, some of our customers, so it's quite a wide range actually of people that buy the Utopia product. So it's either.
Speaker 4:You know, facilities management teams love our energy control product. It's market-leading, it's modern, it's designed so that it's cloud-based, accessible, simple to deploy. You can retrofit it low-cost and easily. So if you're running facilities and you have to replace your heaters or your thermostatic radiator valves, you just want to reduce your energy consumption, we've got a great product for that. So and that audience is slightly different Now, obviously the asset owners like the product as well in that sense because it drives a kind of almost like a guaranteed saving I don't like to use the word guaranteed, but a high potential saving and that ranges into, you know, sometimes hundreds of pounds of bed per annum, depending on how bad the situation is that we arrive at so they, that's a kind of variation.
Speaker 4:What we've seen in in things like the gamification and education and that kind of whole, wider, wider kind of reaching uh sort of marketing and pr value, if you like, that we bring. It really depends on how forward thinking the operating platform is around things like running sustainability campaigns and trying to build their brand off the back of this type of tech. But where it has been adopted it's we've seen some great success I think there's more to be done in the sector.
Speaker 2:You know, and we always like, think, that marketing should be involved in kind of all aspects of a business and this one is, you know, is a key example of how much difference you know that that takes it from having the data to doing something about it. I think when you get the markete, it, from having the data to doing something about it. I think when you get the marketeer involved in being able to kind of cascade those messages down. I just had another question going back to what you said earlier about the data, and you were very much talking about rooms and and flats. Is there anything interesting that you glean from monitoring energy usage in communal spaces in buildings as well, and has that made sort of significant changes, I guess, to the usage and design of buildings?
Speaker 4:Yeah, less on the energy front but more on the, the footfall. So what we've done, we've got a great example. Actually, one of our clients, you know, like many of these block schemes they're designed with three or a minimum number of lifts. This particular operator developer had a design spec that said, look, we need three lifts in every scheme, but of course then the grand file change in legislation meant that they needed an extra stairwell for, basically, a fire escape. So they're like, ok, so we're going to lose some real estate with that. What can we do differently? So they wanted to look at could they reduce the number of lifts required to two, but with a data-driven, you know, evidence base for that? So we installed our people counting solutions across their three schemes that actually they were live at the time and we helped them understand what the actual footfall was across those three schemes a great sample set of data and they were able to then design out one of their lifts. So there's a capex saving. They created some more real estate, you know. And then effectively, you know that was a really successful use of the of the product.
Speaker 4:So you know, on a practical level, in amenity spaces for design, that's something that we've we've seen work well just on on data more generally around design. We now, because we sit on a huge data lake we've got something like 30 billion data points and it's growing exponentially we've been able to start creating benchmarks and indices which allow us to then measure our individual new customers or existing customers, their portfolios, against the market industry standards. That we are starting to build a picture around. That in itself is really exciting. We're quite early stage, I would say, but we can see already, you know, whether it's domestic hot water through gas and electrically heated or it's all gas heated or electrically heated in hot water. We've got indices now we can map our customers data onto to see whether their portfolio is performing well or not so well against the industry standards. And that's another slightly more abstract but really useful portfolio-based use of the data set that we're starting to build out on here.
Speaker 1:I'm just going to take a quick break now to hear from our sponsor Wash Station.
Speaker 3:Wash Station proudly sponsor this episode of Housed. We provide best-in-class laundry solutions that complement your buildings. Wash Station smart, green, clean.
Speaker 1:Huge thank you to John and the team at Wash Station for sponsoring Housed for this season. There's been an awful lot of noise around laundry this year, so it's really good to see them leading the conversation with us here at Housed. So, jonathan, in terms of ESG, how are you seeing, are you seeing, that there is a shift away from it being sort of a tick box exercise through to, you know, a bona fide investment strategy?
Speaker 4:It's a really good question. So if I sort of rewind the clock back a couple of years ago when ESG became a pretty central initiative for any investment fund and operational platform in the EU and UK specifically, it was all about then. You know, are we collecting data? What data do we have? What data gaps do we have? Are we able to report to things like GRESP? You know that seemed to become, and still is, the center of the ESG universe in Europe, arguably globally as well.
Speaker 4:And then the journey from there went to okay, so what asset level certifications can we develop? And you know it grows presiderated and it's kind of tightened things up and it's now no longer good enough just to be measuring your impact. You also need to be able to show that you are reducing your impact, measuring that over time, and you've got initiatives in place. So I think that journey has been quite helpful just generally to driving people to doing more. But I would say in the last 12 months we've definitely seen an uptick in the type of capital that's coming into the market.
Speaker 4:The liquidity that's now in the market has a much higher threshold and requirements around ESG. So if you look at SFDR Article 8 funds light green, as they're described, the characteristics that your assets need to meet, those set of requirements to be kind of in line with an SFDR article 8 fund mean that you need to be doing at a grassroots level the stuff that we're talking about here, so you know, collecting not just main meter data but understanding that energy profile over the year, being able to monitor carbon emissions to be able to set targets and then have real genuine strategies around reduction in emissions, and that, I think, is really helpful because it's starting to get people thinking a little bit more about okay, if I want to be able to freely refinance and trade these assets, I need to be able to meet that higher threshold. Therefore, we need to be more active around the transition to net zero and not just the reporting and compliance piece that we've been focused on up until recently.
Speaker 4:So I think there was a little vacuum of time there that we're in maybe about 12 months, where that wasn't necessarily a high priority. There were other priorities for our clients which we understand, but it feels like that's come back into play Now. Transactions seem to be happening more frequently. We're hearing more about portfolios being refinanced and traded, the ESG. Let's call it sustainability or net zero, because we've unfortunately been affected slightly by the politicization of esg from the other side of the pond and the reality is a lot of the money here it's us money, you know european, european arm of us funds with that. That's kind of the esg things. A little bit muddied, you could argue, but actually great performing assets that you are reducing consumption in and also managing the risk around having sustainability metrics covered. If you think about performance and risk management, that still just makes good business sense, you know, regardless of what the narrative is politically or otherwise.
Speaker 1:That's covered. The Trump effect question that I was going to come to next. I was worried that there was some kind of drop off and I think you've spoken to that well. So are we seeing a serious green premium now? Because that's basically been the search for any ESG professional, any company operating in that space. Are we actually seeing that there is a green premium now? I know you did some work with an agency a little while back to try to showcase that. So, yeah, what are you seeing?
Speaker 4:So I think a green premium is probably quite hard to measure because without a transaction that has tight alignment to the various different features of it, because there's lots of things that affect the value of an asset when it's traded or portfolio when it's traded and you know green is one of many so it'd be quite hard to unpick, I think, the impacts of green as an upside, but what we've seen is it as downside protection. So there's two, there's two points to sort of make make it make here that I think are really important. First is it's supply and demand. Right, if the money is saying we want green assets and we don't want to upgrade brown assets to green, that's most of the money in the market is saying that's what we want to buy. We want to buy the kind of core capital markets want to buy a product that is green and they can just operate without, without increasing value on the other side through upgrades. That's where you want to point your portfolios at. So you need to be green enough that they can acquire them and run them on the other side of that transaction. Then you get more demand. With more demand, prices increase. It's supply and demand, it's economics. If you're selling the portfolio brown assets where they need to be upgraded. On the other side of the transaction, yes, there is a market for that. There are value-added investors that will come in and, you know, effectively greenify and upgrade those assets. But it's a smaller market and they're looking to extract maximum value as quick as possible, naturally, because that's their job in the whole ecosystem. So I think, if you recognize that you've got a decision to make, are you buying brown no-transcript?
Speaker 4:For a couple of years now, and they were going through a transaction. As they were going through the transaction, the tdd threw up some queries around whether the heating systems that were in situ were fit for purpose or not, whether they they were specified correctly. So, as part of the TDD exercise, the question was do your heaters deliver the right level of heat? And if not, we're going to discount at sale point of sale because we're going to have to upgrade them. We were able to provide a two-year picture on how they actually performed in real life, not through some design or some hypothesis.
Speaker 4:That was carried out five years ago and that data satisfied the incoming buyer's technical requirement and they were able to say actually, yeah, don't worry, we're happy with that. That one's stretched off the list of reasons that we're going to chip our price at the end, which you know. That's the game that they're playing, obviously. So we were really pleased to be part of that process, to be able to say you know, a new use case, if you like, for us, the one that we hadn't anticipated, and it wasn't really about ESG per se, it was performance data. You know how the building actually performs in real life, you know over the course of a couple of years. So, yeah, not quite an ESG initiative, but definitely a data-driven, performance-based example of you know, of real value at a transaction Close enough though.
Speaker 1:Now let's hear from another of our sponsors.
Speaker 3:This episode is brought to you by Utopia, the smart building platform that helps real estate owners protect the value of their assets.
Speaker 1:From ESG compliance to energy efficiency and resident engagement. Utopia turns real-time data into action, making buildings better for people, planet and profit.
Speaker 2:If you're in asset management or operations and care about performance, Utopia is your essential partner. Find out more at utopiacouk. That's U-T-O-P-Icouk.
Speaker 1:Thanks very much to you, jonathan, for sponsoring. How's this season? So let's talk about adoption. Real estate isn't known for being particularly fast moving, so what are you seeing is changing? What's making operators say, okay, we need this right now, because I'm speaking to more and more operators that are using Utopi.
Speaker 4:That's a great observation and point that we've had to work with over the last couple of years in particular. So I talk about tailwinds and I think two and a half years ago, when we launched the product and we could show the roi and there was some scale up for us, we really did scale quickly. We had two really significant tailwinds the energy crisis, which obviously no one wants that to return on a you know, maybe from a business point of view it's quite helpful to me, but at the point in time the energy crisis was a definite tailwind for us. And then ESG reporting was a new thing as well. So they created tailwinds and that kind of pushed us up the priority list in terms of investments that might be made by the asset management teams. So that was really helpful.
Speaker 4:Then last year there were other priorities that had, you know, fire related issues that needed to be addressed clad in. You know, fire eggs generally haven't changed, so they were different, and also student numbers were down initially. So I think the combination of those two factors meant that the priority shifted to something else. That really is a challenge for a business at our stage, because that meant that we had six to nine months of delay in sales pipeline. So that doesn't sound like a lot and in real estate it really isn't a long time six to nine months but in the world of startup or scale up as we are now, that is a long time for us and it meant I had to manage all of my stakeholders, make sure that there was enough liquidity in our business, and you know which we did and we've got amazing shareholders behind us. You know we've got some really um, great support from our partners, but ultimately that was a very, very steep learning curve for us around. Okay, how do we manage through these fluctuations in activity? And I think we can see already this year that you know we're six months in now we can see that the activity levels have increased.
Speaker 4:A number of those deals that were kind of delayed last year have started to convert and I think they're on reflection. That is because of the things I've just described. You know those priorities that kind of superseded us in terms of CapEx projects. They've they've kind of been taken care of. Now they're budgeted in, the projects are running and you know, because our product delivers a straightforward return on investment spend X, save Y. It still makes really good commercial sense If the capital's there and there's liquidity in the system.
Speaker 4:Regardless of whether you're in a hurry or not, the sooner you do it the better, really, because you're going to start saving now. So we try and encourage our customers to talk to us, if they can, as early in the year as possible, because we want to try and hit the next coming heating season for them. And, of course, there is a lead time to installing technology in a building. It's relatively short, we can run fast, but the next two or three months for us are going to be really important in terms of conversion of pipeline and making sure we can keep all of our customers happy and deliver value for them in the next heating season. So but yeah, it's a challenge. You know I always talk about we're running a, we're in a sprint and real estate is running a marathon, and it's just how do you, how do you, calibrate those two things? You know it sometimes feels like we've run out of steam a bit quicker than everyone else. Yeah, I know we're working it out as we go down, yes, and and.
Speaker 1:On a personal level, you know as a, as a founder of a large business. Now what's what's been the most challenging thing for you over the course of the last however many years you've been running utopia?
Speaker 4:I'm impatient that's probably me. There's a problem of my impatience because you know I see really clearly how much of an impact we can have on this sector and we we have introduced, you know, lots of technologies really quickly. You've seen it yourself along the last 18 months or so. We've we've really ramped up our capabilities in the last 18 months, you know, adding things like the resident engagement toolkit through our partners at space flow. We've introduced two new energy control products. We've really ramped up on our operator platform, making it easier to use easier than ever to use and we've got lots still to come.
Speaker 4:So my challenge is always you know we're keeping everybody focused on the main prize. We want to dominate and be the main market leading product in student housing in the UK and Ireland. That's our strategy, that's our focus. You know we've got a long way to go until we'll actually reach that point, but we've got the foundations ready and you know we're engaged. People know who we are. You know we plan to continue investing in the product for that customer segment because that's where the opportunity lies.
Speaker 4:So my biggest challenge is keeping everybody especially in those slowdowns like we had over the last nine months aligned to the vision and making sure that everyone still get believes in what we're doing. But yeah, I think I've overcome that. I mean, we've got some good points of evidence. People who are in the space you guys included you know you recognize what we're doing and that this will, over time, we would deliver exactly what we're trying to deliver here for our shareholders and for our team. So that's the biggest one. You just got to be resilient as well. I mean, anyone who starts a business and expects it to be easy, forget it. You know, plan for the worst and hope for the best would be my advice to anybody who starts a business, because it is tough but massively rewarding I think, from an observation looking out.
Speaker 2:You know, excuse the pun, but doing what you're doing takes an awful amount of energy. You know, human, personal energy, because I think you know, we've, we've heard ESG being called a trend. You know, we've heard it at conferences a few years ago. It's not being mentioned anywhere near as much as it was. You know, and you've got to keep those conversations going all day, every day, every year. You know whether people consider it to be a trend. It's not trend, it's life. You know and you know we've. You know, as a planet, we've not made anywhere near the amount of headways that we should have. So you know what you're doing is something that people need to be, you know, be aware of and be conscious of all the time. We can't drop it. It's not something you know we're not going to complete it, are we? Oh, well done. You know we saved the planet. You know.
Speaker 4:Yeah, you know, well done you know that's not going to happen.
Speaker 2:Sadly, we're not ever going to be at a stage where we can stop caring about the planet and where we can stop looking at ways to improve our behaviours. So therefore, you can't stop either, and I don't. You know, being a scale up business, you know I don't think we can underestimate how much energy that you know that must take. So you know we're all grateful that you're. You know you're in it in the sector and you know you're doing such great work yeah, well, thanks for that, sarah.
Speaker 4:And you know, ultimately it's the team the energy comes from, the 50 people that we employ that are all focused on the same goal. You know it's really clear we've got great alignment in here. You know we're trying to do the right thing by the planet, by our people, and I guess the bit that I've been solving to is making sure that's all profitable for our customers and that's the, that's almost the billion dollar challenge for the business. But we keep working on that. I think we'll get there in the end and, very fortunate, I've got co-founders here, um, who put energy in to the same level that I do. So shout out to john, ben and folk, and also, you know, the everyone behind us in here. I mean, dan, you've met a lot of our people. We've got some amazing people in here and, yeah, it's their energy that I thrive from and it gives me the energy to keep moving forward.
Speaker 4:But you're right, esg unfortunately has had a little bit of bad press. It's natural, as anything with something as big as that, people attach anything to it and then all of a sudden it's sort of diluted as a as a movement. But the reality is we need to decarbonize. That's a fact one way or another, and we need to look after the people on this planet that we live on, you know. So, ultimately, that that's not going to go away, doesn't matter what acronym you give it. That still has to continue and we have to keep pushing towards that goal it's the business of doing good, isn't it?
Speaker 1:I think that's the uh, that's the key thing. But if we have this conversation again in 12 months time, jonathan, what, what? What do you hope will have changed overall? Either about utopia or the the sector as a whole, or both I think the sector I'd like to see adoption increasing.
Speaker 4:I think that we've proven it. It works. Um, the roi is, you know, demonstrable. You know, I guess investment behind that now is something we need back from the industry. We would like to have back UK and we're on track to do that. I'm starting to look at some adjacency. We've got some project work in Australia, some in the US. We need to do more in Europe. We've got plans for Europe. And then adjacency in terms of build, rent, single family. We are developing those adjacent markets so that we've got the ability to scale into the next thing as we evolve and develop that. So, yeah, and then let's not forget to mention ai. You know that is a significant risk and opportunity for humanity and for business. You know, ultimately and I think the way I'm looking at ai today is, you know, every, every conversation I have, including this one now it will be introduced as a theme to discuss whether it's operationally, how can we be more efficient?
Speaker 4:what can we use AI for? Whether we're looking at our competitive landscape and understanding the threats that are there, or whether it's something that we, you know. How can we think about using AI? And we've got some great plans in our product, you know, to make it more valuable, to make it more relevant in the long haul. We're building this data lake. You know that's definitely our moat as a business. You know, the more information and knowledge we have, the more we can leverage AI. But AI is a great opportunity and a huge threat as well, so we just need to kind of keep an eye on that really.
Speaker 1:I would just like it known that I didn't mention AI first here and I didn't mention Verboflow once. Jonathan, thank you so much for joining us. That was really insightful and hopefully it's not just one of those typical sort of sponsored podcasts, as it were. We're very grateful for you sponsoring, but it's really good to get your insights as someone who's been within the sector, who's really trying to do some good and has built a very credible product that is delivering a significant amount of good to the industry. Yeah, thank you very much for coming in and thank you very much to my student halls for being our headline sponsor for the season.
Speaker 1:We're very grateful of your support, dan, and of course, to utopia and wash station for coming on board for season four. If you work in the pbsa, btr, co-living, hmo and university accommodation sectors and enjoy our weekly podcast, please do go and give it a rating or review it on your podcast channel of choice. We will be back next week where we have a section from Holly, from Howard Kennedy, on the renter's reform bill. We look forward to seeing you again then.