Interview summary

0:04 Introduction

1:58 Who is Birgitta Schock? An Introduction

4:02 What is the _xCH21?

7:07 What will be the effect of BIM being obligatory?

09:18 Will the issue of sustainability change the real estate sector in a fundamental way?

12:10 Where comes the push from to integrate sustainability into real estate?

13:52 Is data, the usage and the transparency of it an important governance factor?

16:03 How is data completeness an important factor for professionally managed real estate portfolios?

17:40 Can machine readable law bring an advantage or does it even has to be mandatory regulated?

23:18 What imapct would machine readable data have on the whole industry?

27:52 Is there a basis for an open system in the real estate sector?

30:59 How is the bacon belt going to change in the future?

 

Full transcript 

Nilson intro (0:04):
Welcome to our Spatial Future Series. What we're doing here is we're bringing our ecosystem to the table, we're taking the Digital Twin as a base where all the data of the physical world comes together and now we're asking ourselves the question together with our partners: what does the future look like.

What does the future of spatial design look like, what does the future of real estate development look like, and how can digital solutions and data help to simplify the whole process - maybe make it more complicated, revolutionize it, automate it - and ultimately what will the future of real estate and spatial development look like in 10 years.
That's what our data partners are here for, that's what our app partners are here for, bringing everyone to the table to discuss exactly that future.

Start of the interview

Nilson (1:18)
Today we have Birgitta with us, I am very pleased.

Thank you for taking the time, despite the fact that everything is so stressful and that it's after the holidays.

Birgitta (1:26)
Before the holidays! (laughs)

Nilson (1:28)
For you before the holidays.

We created the Spatial Future Series to have an open discussion. And I think it's around the questions of how is digital technologies coming into the real estate industry?
We're trying to have a very holistic picture of the whole thing.

And the first thing I would ask you is just introduce everybody to who you are. For those who don't know.

Birgitta (1:54)
LinkedIn Account, right? Just take a look! (laughs)

Who am I: Brigitta Schock. As I said, I'm an architect. I studied at the ETH. 
That was also a few years ago. And the few years here I have to say that my studies were not yet my final point. But that was clear from the beginning, which is why I went on to Stanford. My main interest there was the subject of collaboration. Getting out of silos.

That's also what led me to do a master's program at Stanford, which is about bringing architecture, engineering, and construction management together. Chance would have it, it
was also the start of our office. We didn't know it yet, but we had a competition just before. My partner was in Switzerland for three months, living in the USA.

We handed in the competition, decided that we go to Stanford and study. And the second day we arrived, we got a call. We won the competition. No office in the U.S.
and 48 hours later you have to be in Switzerland.

Nilson (2:57)
Right..!

Birgitta (2:58)
So who am I? Probably someone who has learned well to deal with quite difficult situations, even the unexpected, and to try to learn to navigate through a lot of froth.

That is, architect. In the meantime, doing a lot of other things. One thing I still don't do to this day is single-family homes. We don't have the talent for that. But other than that. Once from the corporate directive on the whole topic of digital transformation - so not just BIM, but really thinking broadly.

Yes, that's me. I come from a manufacturing family, from the textile industry. You had to learn to get by somehow. 

Nilson (3:41)
Cool. We did meet each other February, March of this year?


Blog Post Picture SFS 2 Duo-1


Birgitta (3:46)
Yes, since just before _xCH21 was happening.

Nilson (3:49)
That's right. And then you invited us to the Digital Twin Roundtable for _xCH21. Tell us very briefly, _xCH21 the event format, what's the goal of it? I know you put a lot of heart and soul into making it fly. It was all planned offline and then digital.

But tell me very briefly: What motivated you to bring the whole thing to life? What is the goal and maybe what is the future of it?

Birgitta (4:19)
Future, I can say that right now, that's kind of in the stars or somewhere. I can't say.

What was it that moved me? It was actually a very simple story.

As is often the case, it starts small, then gets big, and sometimes gets complicated. As you may also know, I'm the Chair of buildingSMART here in Switzerland. That since 2016 and we have a summit twice a year in the buildingSMART International community. Usually that's been physical. Once here in the European region, once in the Asian, American region.

And about so 2019, colleagues from Switzerland approached me and had said, it would be great, if we could bring such a physical event to Switzerland in 2021 because we're planning on BIM becoming mandatory. Yeah, no sooner said than done. I like to be inspired.

That's when I said let's do it. It would be a great story for Switzerland.
Whenever the topic of BIM comes up as a mandatory, that you get out, try to make a combination of an international event and a Switzerland-wide event.

That was the basic idea behind _xCH21, which was still planned as the buildingSMART International Summit in Switzerland. And then everything turned out differently. I think at the beginning of 2020 we were still at a meeting in Davos with a colleague from International and that's when the topic of Corona came up for the first time.

Somehow just under four weeks later we were in lockdown. Then a couple of weeks later we asked: "Do we continue or do we not continue?" We decided: We do continue.

Why did we decide this?
What do we want with the format?

We really wanted to take the opportunity to bring the international guests, but also the national protagonists together and start a conversation. And at some point, in the summer of 2020, that
really came out quite intensely as well. Online events over three weeks can be very exhausting.

We then said to ourselves: It has to be something exciting. That's when the idea first came up to do something like an arena where you can have controversial discussions.

That's how the roundtables came about. 

I think the format has proven itself. The conversations were interesting.
The effect, one never thought to take up this format at buildingSMART International.
They have now taken it up. And the nice thing is: The next virtual summit with round tables is in about four weeks.

Nilson (6:42)
Very nice.

Birgitta (6:43)
So if you ask me: What will be passed on? On this international level, the format has been recognized as an added value, because it also allows different regional contexts and protagonists to be united. And whether there will be a continuation in Switzerland...

That is written in the stars.

Nilson (7:00)
Very cool. You already touched on it briefly. BIM will be mandatory for the large area. What's your take on what that's going to trigger?

Birgitta (6:21)
So it's already mandatory. Since January 1, 2021, it's mandatory for some purchasers. 

What's going to be the trigger? Well, I've said this before 19 years ago when I
came back from Stanford and believed, the whole digital, especially the Lean Construction topic is a piece of cake and will be here in a year or two. By now, I don't make statements like that anymore.

What's going to be the driver?
I think, quite simply, the question about why we are doing this.

To me, one of the biggest reasons is that we have raw materials. Raw materials are finite. And we have other resources, they're finite too. We need to develop a resilient behaviour. And that's the only thing we can do with supported tools.

It's not the tools that matter, the change of our behavioural patterns matters. That's why I think we're not going to have a choice. But like I said, I've said this before 19 years ago. I don't like to go out on a limb again on a prediction.

Nilson (8:06)
That's so wonderful today. That's already the next topic.

We have finite resources. I think we had a summer in Switzerland that was a little bit different when you look at the weather. Sometimes it takes moments like that for people to start thinking.

And I think by now more and more people are becoming aware of what then, not global warming, but climate change can bring. And the real estate industry also adds a big or a very big part to the whole carbon footprint of the world. We have the whole issue, ESG, a lot of people already can't even hear it anymore - big buzzword again.

This time it's coming from the financial industry. The one that ultimately has the leverage and has the money. It's coming from the big investors. It's coming at the European level. Asia is following suit. America is not quite there yet and it's slowly becoming an investment standard. So even for all the private equity, for larger funds. Anything that's publicly listed is going to be a huge issue.

Do you see a chance that this will also drive the entire real estate industry forward?

To look at the whole issue of sustainability more holistically? Or do we get into dangerous waters again as for a green washing label and everything being "fine" again?

Birgitta (9:33)
It's a big question. Especially since this is such a huge topic...

Nilson (9:42)
It's Monday, so... (laughs)

Birgitta (9:43)
That's an exciting question, and I'd like to shed some light on it.
I can only say from my point of view. I see a lot of efforts at the moment that actually have more to do with greenwashing than anything else.

For me, the question always arises: Have we actually arrived at the right question?

And I have, maybe you know this or maybe you don't, I'm now starting a CAS program at the ETH Construction Processes in three weeks. One of the modules is the fifth module. That is, the last module in the first semester is circularity, sustainability.

Of course, we've invited speakers there on madaster, building passports, question states through the data use, the data based looking at a whole life cycle chain. But I also invited someone who is looking at the substance value flow and actually once turned the other way around to say, "okay, are we even on the right track with what we're looking at?"

Is what we are discussing at the moment with sustainability really the right place for the question or do we have to ask the question differently? At the end of the day, we don't gain anything from collecting, reassembling and recycling things if what's brought together afterwards is a grey sauce that can't really be used anywhere.

I actually think it's a topic that will take us or saddle us with a few more years of deep research. But I think it's slowly getting into people's minds, it's getting there and particularly, you just said it, with Corona, but also with certain cautionary climatic changes we're noticing right now.

I think it is more Corona than a climatic change, to be honest, but any bottlenecks in the production chain, material availability has arrived, wherever the trigger is coming from for the industry: It's coming.

Nilson (11:34)
Maybe very briefly for everyone, ESG, that's such a nice acronym, stands for "environmental, social and governance reporting", which has now arrived in the financial industry, relatively broadly and basically looks at all investments under the various circumstances.

What is the environmental impact?
What is the governance and what is the social impact?

From that, criteria emerge. I think governance and social is perhaps not quite as relevant for the real estate industry from the sustainability aspect. Where do you see the push into the environmental? That this can really make a difference in the long term.

Birgitta (12:17)
So you said something right before. The push always comes when it comes a little bit from where the money comes from. Where the big money is, there are now also entire programs that are being developed, especially for investors who want to invest in sustainability, where they should move in.

There is a lot of work going on at the moment. I see the governance issue a bit differently.

I do believe that governance will also become relevant for our industry. I also think that we are experiencing something here that is perhaps still very much in its infancy and in principle at the moment. And there is another topic like buildingSMART data exchangeability and reliable data exchangeability and above all readability.

I believe that we have to develop something worldwide relatively quickly, which perhaps buildingSMART already has in its beginnings. That is: How do we put the information to use since everything that is being strived for in these programs at the moment is only possible if we have reliable information.

And that's why, I'm very clear on that, when I talk about the environment, I'm not just thinking about the built environment, I'm also thinking about the non-built environment. Not just what we see above, but what's underneath and how it's all driven. That's why governance comes in here as well, because it's cross-country. So it doesn't stop at the border.

Nilson (13:36)
Of course not. Neither does the environment.
If I can just pick it up for a second, you brought it up: Data, data transparency, data reusability.

Is that a governance issue for you?

So for you it's a topic where you say: "A good governance of a real estate portfolio, of a real estate fund is that you then also have exactly these data standards somewhere and also have collected the data at all for your portfolio."

Would you include that as an important criterion, for example?

Birgitta (17:28)
That's actually the case. So I see this all the time in my everyday life, in my environment.

Everybody's always trying to get from 0 to 1. You do all the pilot projects, you collect data and then it stops again. You go back to zero. And I think there needs to be a commitment here, a governance issue is hiding in there.

Otherwise, everybody starts all over again and the problem is, if everybody starts all over again it goes on for a very long time and most importantly, it doesn't achieve anything. At the end of the day we have achieved something that has achieved nothing because we haven't thought about it beforehand: What is actually this minimal deliverable that we then pass on?

It's interesting then when we go from 1 to 2 from 2 to 3 and so on. So yes, governance is something that could support us with going through the whole process.

Nilson (14:54)
I think that's an extremely exciting point of view because I think at least with us, as we proclaim it. That's also how we ultimately position and explain the digital twin. That's Common Data Language at the end, that's the Dropbox, there's a lot of variations how to make it explainable for the layman.

But in the end it's about the fact that a building in the physical world has a data representation.
The environment has a data representation, the environment has it too and in the end it all interacts with each other. It's not just object specific and then the object is in context again.

When the zones change, or when there is a complete change in terms of social and economic factors, we get into the economic crisis for example. Then it also has an impact on the entire houses that are then in that zone. And is the digital twin for us, actually something holistic.

We've never looked at it before, that it actually becomes such a governance issue.
Now if I make a comparison with other investments, take equities for example, there's a complete reporting there as well.

So would you go so far that in the future it might be that a portfolio, especially of a professional managed real estate fund has to have the data at hand to be able to do sales and certain issues afterwards.

Would you go so far that this is the right approach?

Birgitta (16:20)
I think I see trends towards that. Clearly, whether we're looking at the public sector or whether we're looking at private, large portfolio owners doing that. They're actually going in that direction. It's really about Distributed Data and its management and how we get that together. And I think that if we're going to pursue this seriously in this sense of the resilient approach and we have to, it would have to go in that direction.

How quickly that can be done or how quickly you can move forward. I don't know, it's really difficult to say.

But I really do see approaches that larger orderers, especially in Switzerland, they say "we set the specifications because we also want to make our portfolio slowly readable", meaning machine readable. "Not only because we want to, but we have to."

Nilson (17:10)
If we take it a step further there.

There's always the way: Either you do it for efficiency and you used a nice word for it, machine readable or machine understandable. That's where we would get into the whole level of smart
contracts that are already being thought of in other industries.

So in the end, you can get to the point where you say: There is also machine readable law.
There are also laws that can be interpreted by the machine in order to automate certain processes.

Do you see it as a competitive advantage or do you see that we have to go in there via a regulation and basically say: This is a standard that has to be established like this?

Birgitta (17:52)Really difficult question, because there are many factors involved.

First and foremost, circumstances, local circumstances, country-specific circumstances also play a role.

You can say: Yes, what we have at the moment is something like that. To push the present even longer, a little bit nicer, a little bit rounder, a little bit better, a little bit more machine readable, but still not machine readable or really accept that we have to rethink, that we have to rethink the switches.

And I see the possibilities there as well. Even what we have in the text today are
norms, are they orders, whatever they are. Basically, we would have to clean things up anyway. If you just take a look at such a norm work or an order work. And there are really many people who have given it
a lot of good thought and have already done the work. Then we see very quickly, for example, ordinances.

In which ordinances are there formulations? They are exactly the same.
How many formulations are there? They are very similar.

You'd just have to commit yourself. Is it A - equal or B - not equal. Zero or one, it really is. And then we really see how big the difference truly is. And the difference is in the single digits. So we're not even close to 10, we're more like mid single digits.

If we want to get over that hurdle, it doesn't have so much to do with digitization or with machine readability, but with making it very easy for everyone to understand.

I simply exclude the machines now and say: "If you and I want to agree faster,
then we simply have to make sure that you don't have to read 500 pages and I don't have to read 500 pages. Because otherwise we won't want to work together anymore."

Nilson (19:40)
That was the whole thing too and I think that's where the machine-readable part comes in, that you take all the ambiguity out of it. So that you take the interpretability out of it. A machine can't do that.

And the human being, he enjoys this grey area and then there are arguments or sometimes hearty discussions, because exactly this grey area is the question of interpretation. Taking this out, that is, the step of making machines readable, can then also clarify many conflicts and many issues that we have today as problem points anyway, because it is simply not clear.

Exactly as you said, to actually take the step of clearly defining things. That there is no longer so much room for interpretation or to define things very clearly. That is an area that is not clearly defined. There is then the open discussion, the open debate, what went along.

Birgitta (20:35)
So I think that really needs the softness. So for me it's always easy when you have such principles clearly regulated. That we are at least no longer pulling our hair out. Because interestingly enough, that's where most of the hours are spent.

And really, if things get serious at some point, we rather put that in the back and that's why
I think we should think a little more openly. I also don't believe in just one model anymore,
which is the correct one. If we look outside we see many differently shaped roofs.

There will be different models depending on what I really want to achieve with it, what value I am aiming for. But it is precisely this ambiguity, this complexity that needs to be managed, that needs tighter rules. So it's a bit of a chicken and egg problem. Where do we start?

I don't believe that everything has to be regulated and standardized. Sorry, I don't. There's nothing new there. Well, there's newness in revolution. But this is something we might not desire.

No, but I actually think we are so for me a tipping point. We're beginning to see something coming.

That is, existing things must continue. I'm very clear about that. We can't just pull the emergency brake. It has to continue. But new things must be able to develop in parallel. And that must be treated with respect and the right environment must be created.

Nilson (22:07)
Yes, exactly.

If we're on the topic that new things have to emerge. The proptech scene in Switzerland has also been around for a few years now and is trying to get more and more attention and also develop the industry. I would say we have now actually the second big wave and the third big wave of proptechs coming.

The first one was the portals and the first ones that even collected data about the industry, where then the Wüest Partners, the Fahrländers, the ImmoScouts, the Homegates were created.

That was the first big wave. And now there's been a bit of a pause in between, I would say. So there was a second wave and a first wave. And I think that now exactly this awareness is emerging that it is only possible to digitize if you have a data representation at all, if only data is available.

It is very, very difficult to say what this building could do if you don't have the data. So if they're not machine readable. Do you think this will trigger a third wave of completely new applications?

And we have here a Special Future Series, so let's take it maybe five steps further. What would it also mean for the industry if we now really had everything machine readable? What will that bring in terms of disruption and transparency, which may be unpleasant today or which today's players might not find so great?

Birgitta (23:35)
Well, a very simple answer. I'm not so sure that we can continue to assess our
whole portfolio the way we've assessed it today and be graded the way it's graded today.

Yes, transparency is uncomfortable. There will be certainly changes and some quite small such changes we have already experienced ourselves, we have noticed it, if we say for example, we make something under total cost of ownership and take it seriously, taking all the costs until the end into consideration.

That is all data!

There we can draw conclusions on the purpose, on the circumstances, on the order. So I think a lot of things will change. And there are actually blockers. There are blockers that are embossed culturally and business model wise and we have to accept that as well. I've always allowed myself to sit down and talk with other colleagues from other industries.

One of my main partner industries is the IT industry. At the end of the day, they've been through the whole issue already. They didn't make it on the first try. Maybe there's something to be learned. An important learning really came across my path just the other day. Thanks to the colleague who brought in a word that I've never really been able to anchor until then.

And that is when I talk about working together, I usually talk about collaboration.

Now you can say: Stop it with these anglicisms, take it out. Just say «working together» in german. But for me it is not the same. There is an essential aspect missing. A colleague has brought up something important from the view of the IT sector. And that is the term of the "structural trust".

The IT industry has learned to understand something. That is: We have a structure. You know the structure. You know exactly how it works. You've been trained on it. You know the process. You know how to behave. And I know the process too! That means we're actually both confident in something we're sure of. That's how we've been trained.

I don't trust you as a person. That's nice when I do that, but maybe not the smartest thing to do. So I believe looking backwards at it from the future. Say for example, everything's wonderful. Quite normal. And data usage is nothing new to us. We sit back and then look at it again. Everything is done fully automatically.
We can sit back and relax.

I don't believe in that!

But actually: What kind of structure do we need to create now? That's the switch I mean. What switch would we need to set now to even get there?

Nilson (26:12)
Is it maybe additionally a cultural issue as well?

You mentioned collaboration before, you mentioned business models.
I think in the software industry it took a while too. Microsoft was always the one that kind of did everything privately and has since bought GitHub. For those who don't know: GitHub is a collaboration tool, especially for the open source community, where different programmers can come, collaborate on projects.

I say it's been a huge backbone of the open source community from an infrastructure standpoint. Without this, things would be much harder. There were fears there, but there was a huge commitment for the support of open source. And open source has become much more than a cultural movement.

It has also become the source to find business models that also work under these cooperative approaches and also under a certain openness and transparency. Where at the end the IP, which is no longer necessarily in the code or in the tool, but by the question: How can I reach users?

How can I design business models based on that and so of course have also allowed a very high degree of innovation? Because what one of them delivered was the puzzle piece of a larger picture and can thus be embedded very, very easily. But that is also a certain cultural attitude, that together you are stronger in the end and win together.

How do you see that in the industry?

In the end every real estate project is a collaboration. Very, very few do it all from one source. Is the foundation there for us to go into a cooperation and not just collaboration, but a cooperative, open system. Which in the end also equals an open source community or comes close to that?

Birgitta (28:07)
Is the opportunity there? Yes, the opportunity is there. It's very clear.

Do we want it? That's the other question.

I actually think there are very cool groupings like this emerging right now, that simply say: Let's just try this. If we just move on with this now, then nothing will ever change. So let's give it a try.

I think we have everything. It's really all on the table. There's a lot of citing of the iPhone. There was a pre-iPhone time. There's a post-iPhone time. There was a lot on the table then, too, and it was more scattered. It was complicated. It was very complicated and I actually didn't understand for me as a person what I was getting out of using the thing.

And that's also the point I always make.

All the things will work then if I understand as a person why it's better for me. Is it saving me time that I might then have more as free time or doing anything that I would rather be doing? Yeah, that's really the question behind it for me.

We need to understand why we're doing it. Because otherwise, it's my experience, I come from a lean background. We've been doing lean projects for 20 years or longer than that. What happened? The project can still be so successful. You know it yourself. First chance they get, the whole team goes back to doing it the way they're used to. Because they didn't get it!

That's culture change. It's a change that has to take place with you. And it has taken place with me. Maybe that has to do with the fact that I come from a manufacturing family. For us at the time, that was the reason we ended up in Switzerland. My parents came from Germany to Switzerland because the textile business was here longer around.

Unfortunately, the Swiss worked even more with foreign employees. My father really didn't know Italian or Portuguese and was totally untalented linguistically. That meant he had to find another system. He then just worked with colored stickers. That was great for me as a little kid. Sticking notes all weekend long. I'm coming from this direction: You just have to get out of your comfort zone.

And I think other countries actually already have the drive. In Switzerland on the other hand, I also talk a lot with foreign colleagues who say: My God, getting it through in Switzerland is always a tough job and we better don't try because it's just very comfortable now."

We still have a good system, good buffers in there. Never change a winning horse or team or whatever. To get out of the bacon belt, into the zone, which is not so comfortable, is also not normal human behaviour.

Nilson (30:31)
Now let's get a conclusion because afterwards we have to move on.

Get out of the bacon coat. Last quarter, home prices went up an average of 4.2% in a single quarter. I think for a lot of listed stocks or stock market investments, it's tough for them to do the same. That would be a performance of almost 16% after one year, also with an asset, what is considered slow and safe in long term.

Does the bacon belt get bigger or does that perhaps then give courage to do something new? Or do we have to get into a crisis first, that the momentum is there to really make a difference?

Birgitta (31:11)
I'm really not a financier. I can't say it. I can only answer it very personally.

I do believe that if prices continue to rise as they are now in Switzerland, then at some point Switzerland will not be interesting for certain people and it will solve itself on its own. Because when people come who say: "I can no longer afford to live here."

But from the education, from what they can do is very valuable for Switzerland, then there will happen a regulation by itself. At the moment it's just a huge bubble blown completely out of proportion.

I see how prices are rising in certain places. And I’m like: “Are you serious? What changed there at all? The property didn't become more worth, you didn't invest nor did anything else change at all".

It doesn't make sense. I think making sense is gonna be really hard.

Nilson (32:03)
A final word from your side?

Birgitta (32:05)

Thank you so much for having me! Altough I arrived in a rush, excellent interview, enjoyed doing it, very exciting. Not a dull second and maybe we should continue this at another opportunity. 

We do, by the way. You're with us on our CAS.

Nilson (32:22)
That's right, I'm really looking forward to that.

Birgitta (32:23)
We have very interesting speakers and in particular exciting students. 

Nilson (32:28)
Yeah, there's a lot of other issues too. I don't think that was the last time.

Thank you so much for finding your way to us. It's been a lot of fun. Really kind of looked at everything from A to Z, it a very nice all around panoramic view.

Thank you very, very much.

Birgitta (32:47)
You're welcome!

Nilson (32:48)
Very inspiring. And I hope you guys like it now too.

Thank you for your attention.


 

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