Why Corporate Real Estate needs full fibre

Following a summer lull, staff are returning to their desks en masse. On September 16th, traffic at 15 key tube stations in the City of London reached a post-covid peak. At the major banks, the desks are starting to fill up. By early September, attendance at Citigroup Inc.’s office hit more than half of its typical pre-pandemic level. The footfall at JPMorgan rose to 40%, up from about a quarter in August, while the occupancy at Goldman Sachs’s office was about half-half, and that proportion is on the rise.

However, even with this recent surge, most people do not think all workers will return to the workplace full time any time soon. In fact, in a recent survey, 70% predicted that workers would “never return to offices at the same rate”, with the majority preferring to work from home either full-time or at least some of the time. In other words, organisations need to find an agile and flexible solution that will gratify a large number of people with different expectations around what the return to the office should look like.

In this “new normal”, the function of Corporate Real Estate (CRE) is evolving. If work doesn’t strictly depend on office space, then the workplace should enable users to perform better than they would do anywhere else, including the comfort of their own home. If companies are feeling as though their investments in office space aren’t paying dividends, they will simply leave. This presents a challenge for property professionals to make their portfolios as commercially viable as possible.

Connectivity is a foolproof way of ensuring the commercial viability of a space for years to come. You can have the finest building, in the most buzzing cosmopolitan part of town, and all the free tea, coffee, and networking sessions in the world. But if that building isn’t pre-wired with a bulletproof internet connection, then who’s going to want to work there in this day and age?

Workplaces need to be ‘smarter’

“Connectivity, connectivity, connectivity” is fast overcoming location as CRE’s new mantra, and digital transformation is a key element in driving this. Connectivity goes beyond enabling tenants to have a basic LAN with full-strength WiFi bars on their laptops or supporting dedicated internet speeds and uptimes. Savvy tenants are also interested in smart building technologies and automated building management, which further drive the need for connectivity.

For example, remote lighting control and temperature management, driven by IoT (Internet of Things), are becoming expected features rather than luxuries. This is particularly relevant in a time of lowered occupancy rates and hybrid workplace models. Tenants and property managers can save on overhead expenses by using smart building systems to only light up and heat or cool the areas in use.

Smart building systems can also track usage data and be programmed to make changes in response to external temperatures and real-time occupancy. To provide such capabilities, buildings need both internet connectivity and equipment such as sensors for temperature and motion connected to IoT devices.

And while smart offices are already a go-to for companies of all sizes, the demand for these tech-centric office spaces is only going to increase. In fact, the global market size for smart offices is projected to hit more than 57 billion by 2025.

Real estate developers want to futureproof spaces to accommodate this level of connectivity. But the problem is that many are still relying on copper cables that are not built for data heavy services like video conferencing or streaming to deliver this. If they want to effectively futureproof a space, developers must look towards a full fibre strategy that provides fibre all the way to the premises, not the cabinet. It’s widely recognised that legacy copper and coax hybrid networks can no longer support the growing needs of the industry. Full fibre Fibre-to-the-Premises (FTTP) is the most future-proof technology and important for supporting high-capacity mobile networks such as 5G.

Real estate developers and landlords need to understand the economic advantages of investing in their own full fibre networks, which can be easily included as part of new developments. Fibre should be viewed as a real estate investment. Not only will it add value to a property, but it can also lay the foundations for smart services and create ongoing revenue streams. The challenge is that developers don’t know how to be service providers, but there is a model that can offer a solution: Open Access.

Investing in an Open Access model

Traditional monopolistic and vertically integrated networks entail one Service Provider owning and managing all layers of the network: the fibre in the ground, known as the “passive layer/network”; the network management systems which comprises the electronics and software – the “active layer/network”; and provision of services to the subscriber – the “services layer”.

‘Open Access’ typically means the access granted to multiple Service Providers on a wholesale basis over one physical network infrastructure. This enables different Service Providers to reach the subscriber without the need to deploy a new fibre access network themselves. All products and services are made available to subscribers through a web-basedportal via independent Service Provider partners, making it easy to sell, provision and maintain the network with minimal system administration.

An open access model disaggregates the different network layers described above. There are a number of variants of the open access approach – the three-layer model which consists of the separation of physical infrastructure, from operations and service provisioning is the most complex but it provides the most flexibility and highest returns on investment.

This means that property developers and landlords can invest in, own, and monetise fibre (the “passive layer” of the network) while the operation can be handled by third parties. These fibre assets can then be leased to network operators and Service Providers to operate a healthy rate of return. Services provided over the passive network need not be restricted to Internet Access but services requiring internet connectivity such as CCTV, BMS, or IoT applications. Multiple services can be provided simultaneously on the same network to the same location, over the same fibre.

The procurement of an Open Access Neutral Operator, such as VX Fiber, ensures that the developer or landlord does not encounter diseconomies of scale or difficulty in onboarding Service Providers. The result is a more competitive environment with lower barriers to entry for fibre and service owners, and greater choice for the subscriber.

CRE’s connected future

Commercial property owners and managers must be agile, with the ability to quickly pivot to accommodate evolving tenant requirements and respond to disruptive events such as the COVID-19 pandemic. Digital transformation and changing workplace models have had a significant impact on commercial properties in recent years, so imagine what the next five years will bring.

Regardless of what may come, one thing is undoubtedly here to stay — an ever-increasing demand for internet connectivity and capacity. Now is the time to invest in the future by prioritising a robust and reliable full fibre infrastructure that will help the CRE industry weather the storm today and future-proof its properties for tomorrow.


Local Authority Forum back for it’s second year!

With a triumphant return, VX Fiber’s Local Authority Forum: Delivering Connectivity for Everyone will be held at the Business Design Centre London on 19 September 2022.  And with great excitement we are delighted to announce our first two confirmed speakers – both of whom set the bar extremely high and cement this a not-to-be missed event!

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