As property owners increasingly look to invest in technologically-smart buildings, they should give equal consideration to the cyber security risks attached to advances in property management.
In South Africa there is a growing trend towards increasingly intelligent buildings, and while advancing along with technology is a positive development for the real estate sector, automated systems carry significant risks.
The growth of smart buildings in South Africa definitely makes the sector more competitive and efficient, as it automates a great deal of the functions that would previously have been performed manually.
These developments range from building entry with access cards and parking ticket machines at shopping centres, to automated climate and lighting control and more advanced security systems.
It just makes sense that South Africa, with its energy challenges and security concerns, would also be moving towards developing real estate that address these issues in a cost-effective manner.
However, alongside increasing automation and digitisation, it is crucial that landlords pay just as much heed to the potential risks that these technological advances pose.
A new report published by Grant Thornton entitled: The hidden cost of smart buildings, cites: “Cyber risk management and data protection need to be key elements in smart buildings at all stages of the asset lifecycle. Securing your asset against cyber attacks is about ensuring your ability to get the right return on your investment in a smart building.”
Local real estate landlords may mistakenly believe that cyber attacks are reserved for the highly-advanced interconnected systems in developed markets, but any system is potentially vulnerable.
An attack can happen when a hacker takes control of a shopping centre’s ticket control system and either manipulates it so that the owed amount on the parking voucher increases exponentially, or it could block all entrance and exit booms from opening and trap hundreds of cars.
These risks are not confined to shopping centres, but could affect offices, hospitals and residential areas as well.
According to the report: “While accessing building systems may not appear to be a high-impact risk, it does provide a gateway to higher-value assets attached to or stored within – such as sensitive tenant data. In addition, the increase in automated systems allows cyber attacks to become more ‘physical’ through the cutting of services, access or safety and security systems, putting occupants’ safety at risk.”
It is crucial for real estate owners to safeguard their assets adequately against cyber threats.
Aside from the cost of protecting your property against physical threats – such as theft and extreme weather – landlords should employ equal protection against the unseen threats of the cyber world. The cost of not mitigating against these risks is potentially far greater to the business over the long term.
The report continues: “If a building shuts down due to its security and systems being compromised, whether it be exposure of tenant data breakdown of power supply, or restricting access to the building – the reputational damage could put the continuity of the asset owner’s organisation at risk.”
Cyber security has to be a business priority for real estate owners. These issues have to be discussed at board level, but given the significance of the risk, it is also important that the business identifies a champion who can take ownership in understanding the impact of the risks.
The report suggests basic ways for landlords to protect their buildings:
– Identify and understand your organisation’s assets, ranging from the people, the premises, products, processes, IP, information and brand;
– Continuously test the cyber and physical vulnerabilities of each asset and establish where threats are most prevalent;
– Employ controls that restrict your employees, suppliers and the public to only the information that they actually need;
– Instil a resilient and effective recovery strategy that enables the fastest possible return to normality;
– Segregate tenant and landlord networks where practical; and
– Ensure that those in your supply chain are aware that they are meeting your expectations.
Technological advances can definitely enhance your property’s earning potential, but similarly, asset owners have to ensure they are fully cognisant of all the risks that they face in an interconnected world. Inadequate protection could mean significant economic and reputational losses.
Lee-Anne Bac is Director: Real Estate and Construction at Grant Thornton.