The pathway with technology in the pathway with the Civil Aviation Authority is there, it’s just a matter of getting through these things in a safe and secure way so, over time, absolutely, it’s going to happen. The reason it isn’t happening today is because we are not at the end of that journey, we are somewhere in the middle of that journey.
Susan Freeman
Hi, I’m Susan Freeman, welcome back to our PropertyShe podcast series brought to you by Mishcon de Reya in association with the London Real Estate Forum where I get to interview some of the key influencers in the world of real estate and the built environment. Today I am absolutely delighted to welcome Duncan Walker. Duncan is Co-Founder and CEO of Skyports, a leading pioneer for locating, building, owning and operating vertiports within urban environments and implementing end-to-end drone deliveries. Duncan has twenty years of commercial real estate experience. He was a Main Board Director for ten years at Helical Plc, a FTSE listed investment and development company. Duncan holds a Master’s Degree in Economics and Management from Oxford University. So, now we are going to hear from Duncan Walker on what the future holds for electric aviation and, in particular, commercial drones.
Duncan, welcome and thank you so much for joining us today. Before we talk about drones and your current business, Skyports, let’s just take a step back, you have a Master’s Degree in Economics from Oxford, you started your career as a Management Consultant at Deloitte, how did you end up in real estate?
Duncan Walker
I have a family history in real estate so my father had a construction management firm that he ran for many years and even as a boy I was doing the filing for his company, I was delivering the wine at Christmas to all the other real estate firms around London so, I have a bit of a background in real estate and it’s always been sort of part of what I’ve grown up with and having done a rather generic Degree in Economics which was great, I went into Management Consulting, I was still relatively unsure about what I wanted to do with my life. A couple of years on Management Consulting confirmed that I didn’t want to do Management Consulting and whilst it was a great transition from education into the real world, I was keen to do something more tangible, something where you can physically see the fruits of your labour rather than sort of more academic, consulting type exercises.
Susan Freeman
So, you went to Helical and I think you left in 2018 after ten and a half years. Why did you decide to leave real estate at that point?
Duncan Walker
Yeah, I was there a long time and before that I did four years at private property company called Edinburgh House Estates, buying retail assets and industrial in Europe and in the UK. I suppose it was partly opportunistic, partly for a change, you know I was in the real estate industry for 15-17 years. It’s great, I love it but it’s rather procedural, you know, I bought I think 60 Aldi’s in the space of three years, at one point. Once you’ve bought your 59th Aldi, the 60th is not that exciting. Having said that, you know, it is a dynamic industry, things change but you know, met my Co-Founder of Skyports and we were talking about the dynamics of transportation and you know how people move around and technology, and you know I don’t feel like I’ve left real estate, I feel like I am still in the real estate industry, just with a slightly different application. And what I do at Skyports, and we’ll talk about it more I am sure, is very real estate focussed, it’s construction, it’s planning, it’s development, it’s physical assets. So, it’s just a different and emerging part of the sector. I think there’s going to be a lot of change in real estate, it’s one of the few industries that hasn’t been disrupted. Insurance has, banking has, medicine is being disrupted. I think our mutual skillsets of law and real estate are going to be disrupted in the near future, there’s way too much friction in terms of how things are done and so, it was just an opportunity really, an opportunity to do something different within the same sector.
Susan Freeman
Interesting. Yeah then perhaps we’ll talk a little later about the opportunities for real estate that come out of what’s going on in electric aviation but, I mean, tell us what you do at Skyports, I mean it sounds you know, sounds pretty exciting and pretty ground-breaking.
Duncan Walker
Yes, so we basically build and operate miniature airports around cities around the world. They are called vertiports, they are designed specifically for what’s called eVTOLs, which is electrical vertical take-off and landing vehicles – just imagine electric helicopters – we do all of the airport functions. So, we built the world’s first vertiport in Singapore in 2019. We’re actively building in Singapore later this year for the first permanent commercial launch in 2022. We’re building in Paris ahead of the 2024 Olympics with a number of partners over there, one of our investors in Groupe ADP which is one of the biggest airport owner and operators in the world. We have a number of projects in the US. So, we build this enabling infrastructure, these vertiports for these air taxis and it’s been an interest transition even over the last three years, I spent a year working on the concept in London building relationships, having lots of conversations where people said you are a lunatic. Those conversations have ceased and people recognise that it is coming now and in the last four weeks alone, in excess of $3.5 billion, valuations in excess of $12 billion, have been raised into the sector so, the big names in the sector, Joby Aviation, just raised $1.6 billion in a SPAC transaction at a valuation of $6.6 billion. Archer just raised a $2.7 billion, Blade in the US, Volocopter have just done a private placement in Europe 200 million Euros. I think big, big, big money entering the sector. That gets a pathway to certification of these vehicles and they are all regulated like any aircraft is with the Federal Aviation Authority or European Air Safety Agency and that is now pretty clear that these vehicles are going to start to be certified within the next two years and that starts the industry as a whole. So, you know we are an enabler for that industry, we are the airport to the airlines. We also have an interest in an element of the business in that obviously it’s very tech enabled, there’s a lot of technology which we are integrating and building, communications technology, sense and avoid, all sort of enabling backbone and to progress that we built out delivery by drone business. So, now I have a team of people that fly drones for customers, testing all of our technology, using all of our technology, progressing the conversations with the regulatory authorities and we’ve built a world class drone delivery business which is pretty extraordinary. We’re the first people to get what’s called BVLOS, beyond visual line of sight, certification in the UK. Yesterday we flew 700 kilometres completely automatic, no pilot, in Scotland, flying for the National Health Service. We’re flying more kilometres than anybody else. We are flying more missions than anybody else. We’re flying what, rather scarily are called dangerous goods but it’s pathology samples, things of medical benefits, we’re flying Covid samples, we’re flying Covid testing kits, we’re flying pathology samples for the National Health Service and that’s sort of ground-breaking stuff which is super exciting.
Susan Freeman
Yes, there’s actually now, you know been quite a lot of press around what you’ve done with Royal Mail with the first UK parcel delivery and also with flying the Covid tests and samples so, I mean that seems like an amazing step forward. Now it’s interesting, when you were talking about, you know where you’re building vertiports and progress that’s been made, you mentioned Singapore, Paris, US, you didn’t mention the UK. I mean, are we behind? What’s going on in the UK and if so, why?
Duncan Walker
Yeah, we are behind. We’re behind for a few reasons, partly political will so, adoption of any new technology needs political sponsor so anything of any magnitude needs political sponsors. We have not been as progressive as other companies in that respect albeit that’s changed a little bit. Whilst London is a world city and if you speak to any of the vehicle manufacturers out there and ask them to list their top 5 locations to launch, London is always in that top 5. The ability to execute in London is much, much harder. That’s partly political like I say, it’s partly regulatory, it’s partly just because of the nature of the city – historic city, smaller buildings, densely occupied – whereas if you compare that to somewhere like Los Angeles or Singapore where there’s more modern buildings, larger footprints, it’s easier to execute in some of those markets than it is in London. Having said that, there’s actually been a recent bit of momentum in London driven by the Civil Aviation Authority who control regulations in the UK and we are actively working with them, London City Airport, London Heathrow Airport, NATS who look after our airspace, the Civil Aviation Authority, a number of vehicle manufacturers to write what’s called the CONOPS or the Concept of Operations for urban aerial mobility so, how do you do it in the context of London? Long story short, it will happen, London won’t be the first mover, the UK won’t be the first mover but there’s a reasonable chance it’s a fast follower.
Susan Freeman
Okay, and perhaps I’ll quiz you a little bit further on the timing of that a little bit later on. So, just, I mean talking generally about the electrification of the aviation industry, I mean it seems to be important for a number of reasons. You know, one is sustainability and decarbonisation and how far off are we from electric commercial passenger flights? Is that a long way off?
Duncan Walker
No, you can do it today. If you go to China, you can fly with EHang, EHang is NASDAQ listed, there are a number of cities they are flying in in China already. They fly automatically so, no pilot, fully electric. In the Western world, within two to three years, you will be able to do it on a commercial basis so, the driver for that is certification by the regulatory authorities, like I say same degree of quality assurances as other air frames and the leading vehicles and there’s about 200 manufacturers out there but say the leading 10 are due to be certified in the next two to three years. We’re planning on launching operations at the back end of 2022, start of 2023 in Singapore where you, I, anybody else can go, pay, jump on an electric air taxi and fly around.
Susan Freeman
Gosh. That’s I, I didn’t expect you to say that. I mean, that is quite soon. So, that is like smaller planes. In terms of sort of commercial sort of flights, you know with a lot of people, is that something that’s coming?
Duncan Walker
Yeah, so the ones we deal in are sort of up to about 5 people. The limitation there is battery energy density so, weight to power basically. You know, batteries are heavy and lifting things straight up and down is very hard so your limitation is battery energy density. If you put a wing on a vehicle then you get the benefit of lift so you get a lot better range. Some of these vehicles do have wings despite taking and landing vertically. When you start scaling that up into bigger vehicles, you are into the territory of defying the laws of physics at the moment in terms of how much you can lift with batteries so that needs step changing, it will come and there’s huge programmes and immense energy going into that, you know, Rolls Royce have been very public about electrification of their aircraft engines. There is much the same in my sort of area, there’s a lot of momentum, there’s also a huge amount of momentum in that larger aircraft space, it’s further away because you need more steps in terms of some of the fundamentals of physics to get there.
Susan Freeman
And have you flown in one of these passenger drones?
Duncan Walker
No, I’ve been in many, flown in none. They’re not certified for use yet so the only people that have flown in them is, other than the ones in China, are the test pilots and that’s a benefit to the industry in that it’s incredibly rigorous to be able to put people in there. I’ve seen them fly many, many times. Obviously we’ve flown our smaller drones day in, day out but the point at which you put a passenger in there and start flying them is a much higher level of security and safety.
Susan Freeman
Yes, I can understand that although I have to say sort of having watched the helicopters going round Manhattan, I think maybe one would feel safer in a drone. So, can we talk a little bit about the advantages of electric aviation and, I mean obviously one of the things we are thinking a lot about now is our crowded city streets, we’ve all had, you know we’ve experienced during lockdown you know how you can actually use streets for you know al fresco eating and making places a lot more user friendly but that sort of leaves us with the problem that we’ve got more, I mean particularly in London, we’ve got an awful lot of cars on the road and they cause pollution but is, I mean are drones something that are going to help us with that? Are we going to see drone deliveries in cities, you know, soon? Can they actually reduce congestion on the roads?
Duncan Walker
So there’s quite a few questions within the benefits of electrification and I’m going to answer a slightly different question first which is the safety aspect that you talked about versus helicopters. One of the benefits of the electrification of these vehicles is that you get what are called multiple points of redundancy so, whereas a helicopter might have a single engine or a single rotor and a single connector between the motor and the rotor, if any of that fails you are in reasonably big trouble. The electrification of these vehicles means you have the ability to have multiple battery packs, multiple motors, multiple rotors so there is no longer a single point of failure in any of these things. That gives you a much higher safety threshold than with traditional helicopters. That, combined with the much lower noise profile of electric motors versus combustion engines, the much lower noise profile of multiple distributive rotors rather than one great big rotor which makes its noise because the speed of sound is constantly being broken at the tips of the blades, that gives you a noise profile which is way, way less. That improves public acceptability, accessibility to dissenters. Combine that with the all-electric nature so, no emissions and you have a form of transport which now can be applied to cities which traditionally hasn’t been very well used in cities so helicopter traffic is there today, it works, it’s functional, but there’s a number of reasons why it hasn’t reached scale, price point, safety, noise, environmental. Electrification solves quite a few of those things. Is it going to replace the car in the city? Absolutely not. It’s a supplementary form of transportation which adds to the existing network and a lot of time we spend with cities is about multimodality, how you integrate with the existing transportation networks, the trains, the buses, the trams, the cars, whatever that is. And we can do that in a way where it doesn’t cost a billion pounds per tunnelled mile to build Crossrail, it costs much, much less to build these nodes on a transportation network. So, passenger air travel in cities, coming very soon. It will become more and more prolific and will be prevalent in more and more cities. In terms of delivery by drone, yes, is the short answer. My view is that that takes longer to come to cities than passenger transportation although there is a lot of debate in the industry about whether that is accurate. My thesis is that the majority of the passenger air taxis start with a pilot and they start with a pilot partly for public perception but they start with a pilot because certifying a vehicle is hard, certifying autonomy is really hard. So as a route to market, you put a pilot in it and then over time, you get rid of the pilot which decreases the price point which increases the safety threshold and becomes more of a mass form of transportation because that price point is lower, the scale is high. If you are delivering cargo, generally you are doing so without a pilot. When we are flying in Scotland for the National Health Service, we have safety pilots at either end, we have full visibility on a bank of computers as to what’s happening at any point, we’ve got the telemetry coming off, we know the wind speed, we know the air speed, we know the ground speed, we know the height, we know the remaining battery, we know the quality of the 4G link, we know the quality of the satcom link, we now the temperature of the goods we are holding in there, there’s huge amounts of telemetry coming off this thing all the time. But what it doesn’t do is replicate a pilot’s ability to make decisions in real time so, we can say there’s an emergency helicopter coming into our airspace, we should loiter, we should return to home, we should ground the vehicle, we can make those decisions. What we can’t say is, there’s a flock of birds and a hang-glider and a hot air balloon and the logical decision is to turn left or turn right. That requires a degree of autonomy that is still being proven. Same challenges with cars. Autonomous driving, exactly the same challenges, actually much easier in the air because there’s many fewer moving parts but exactly the same challenges. Complexity in the air is that the weight of these radars and lidars that you are using is prohibitive because you don’t want to be lifting weight that you don’t have to. In order to get to a level of decision making quality for cargo goods in city centres, you need quite a couple of technological leaps. It’s happening and it will come, absolutely but my theses is, passengers come first because they’ve got a pilot, cargo comes second because you need to solve the challenge of autonomy before that can happen at scale in city centres. Rural applications are very, very different and there’s a very clear reason why we are flying in rural Scotland. That’s partly down to business case, it already costs both time and money to move things on bad roads, ferries, round lochs, round rivers, when it snows, all that stuff is complex but also the air space is much easier to navigate, there’s just less stuff out there in the sticks than there is in city centres. Overlay that with ground risk, we’re flying over forests, we’re flying over the sea, that is a safety threshold that is important to drone deliveries. When you add in flying over people, you are flying over complex transportation environments, absolutely not insurmountable, a different level of safety threshold required to what we’re doing elsewhere.
Susan Freeman
It’s interesting. I didn’t expect you to say that we get the passenger drones before the deliveries but I understand what you’re saying.
Duncan Walker
Well just look at that, we’ll just look at that one other way. Once you have a certified electric vehicle, it runs under the same rules as a helicopter and you can already fly a helicopter in London and Paris and other cities. So, if all that you do, and this isn’t the way this industry is very successful by the way because you need to change the dynamic, but if all you do is just use the helicopter rules and paths, you can do that as soon as you are certified. So, if you are just looking simply for the path of least resistance, that’s the way you go.
Susan Freeman
So, with the drone deliveries that you’ve been running in Scotland, presumably they cut down journey times considerably. So, what is the sort of comparative timing when you’re looking at some of these quite remote Scottish locations?
Duncan Walker
Yeah so we’ve been flying a route, were based at Oban Hospital and we’ve been flying a route to a village called Lochgilphead which is south about 60 kilometres away. That route takes us 25 minutes to fly. Sometimes samples take 36 hours by traditional road transportation to go from there to the pathology lab at Oban airport – hospital, sorry. We are able to fly that route like we did yesterday, 7 times a day, 7 times out, 7 times back. The level of patient care that we can offer as a result of that is a step change. So, not only are these, the frequency increased so you’re not waiting for the van which generally leaves once every other day, you are flying every 15 minutes on demand so we’ve got a full customer interface with the National Health Service, they plug in to a computer, sample ready to go, boom, we’re ready, we’re there in 20 minutes, we’re back in 25 minutes. And what that means of course is that you haven’t got a van doing a hundred kilometre loop because it’s got to drive all the way down there, in fact it’s 200 kilometres because you’ve got to find windy roads all the way down there, you’ve got to go the windy roads all the way back, you know, we’re flying direct line of sight, 60 kilometres so it’s much shorter. You haven’t got the expense of the van going all the way with nothing in it, coming back all the way with nothing in it. You haven’t got the risk of the driver who’s driving on windy roads in the dark and in the snow. But most importantly you’ve got a level of patient care that is much higher. You can start treatment sooner, you can do pathology analysis sooner, you can isolate Covid patients sooner, you can get much better outcomes from the samples themselves so, like anything organic, the pathology sample degrades over time and that degradation leads to a less good outcome when you are analysing pathology samples and if you get the pathology sample basically into the lab within 4 hours you get a much, much better outcome than if you get in 8 hours and there’s a high frequency of repeat sample taking because the first one’s degraded, it’s got too hot, it’s got too cold, something’s happened to it, so the quality of patient care, the quality of customer service, much better with this new form of transportation.
Susan Freeman
So, is there any reason why this shouldn’t now be rolled out across the country albeit you know in rural locations rather than city centres because it just, you know, from sort of a carbon emissions point of view, some efficiency getting things done quickly. Is there any reason why not?
Duncan Walker
It’s simply regulation. So, at the moment the way we’re able to do what we’re doing in Scotland is by creating basically corridors of airspace that no one else can use. Emergency Services can use them, you can’t control what the local wildlife does but we effectively closed corridors of airspace for us to fly our drones in. That works well in lockdown environments where there’s not a lot of air traffic, it works well in rural environments where there’s not a lot of air traffic but it is very, very difficult to scale because airspace is democratic, you’ve got general aviation, you know people that fly for fun at weekends, they are as entitled to use the airspace as anybody else and they have the benefit of a pilot onboard so they are making these real time decisions. The reason that it’s not scaling faster, is that the regulation is not there to permit that at the moment. Now there’s numbers of ways of getting there and the pathway is relatively clear and there’s commitment from the Aviation Authorities and directionally it’s happening, in other countries it’s happening faster and doing it different. You can do basically one of two things, you can obligate everybody to be conspicuous, see and be seen, electronically, so have a transponder onboard that says here I am, this is where I’m going, this is how fast I am going there, and if you have that you can manage the airspace to say if right we know save for wildlife which tend to avoid drones to be fair, anything that is mechanical or electrical, you have clarity of your airspace, you know where it is, you know where it’s going and you can deconflict, you can make sure that Vehicle A doesn’t interact with Vehicle B and you can manage airspace safely in that borough. That places an obligation on pilots who historically haven’t been obligated to carry transponders and it carries an infrastructure cost in terms of ability to receive these airwaves and radio waves that are coming and beam them back out to the community. Some places have done that, Dubai has that system fully functional, works very well, they’ve invested in the infrastructure, they’ve mandated transponders, that’s the way they manage their airspace, it’s very readily enabled for drone activity, will be a leader in the space. The other way to do it is to have robust detect and avoid so, like we said, same as the car, the ability for an autonomous drone to make the same quality of decisions as a pilot. Often, actually, statistically they can make better decisions but you have the sort of real life scenarios versus the algorithmic ones that require a huge amount of data input and analysis and proving and etcetera, etcetera. The pathway with technology and the pathway of the Civil Aviation Authority is there, it’s just a matter of getting through these things in a safe and secure way so, over time absolutely it’s going to happen. The reason it isn’t happening today is because we are not at the end of that journey, we are somewhere in the middle of that journey.
Susan Freeman
And when you say ‘we’, you are talking about the UK specifically and other jurisdictions are further ahead with regulation and making it happen?
Duncan Walker
Others are further ahead, others are further behind, the UK actually is pretty good. UK is also more complicated so we have a more complex stakeholder engagement environment than you do in Dubai, for example, they have the ability to mandate things much easily than we do, they say have a transponder, if you don’t want a transponder you’re not flying and that’s the way it happens. If we say that, we have stakeholder groups that are vociferous, have a point of view saying well I’ve been flying without a transponder since 1963, why are you going to obligate me to pay for a transponder and do things I don’t want to do and that’s fair enough, that’s just a different environment and that’s why, you know, we’re an active democracy and that’s the way things work here and that’s fine. So it’s… we’re on the journey, other people are on the journey, people deal with it in different ways, everyone’s going to get there in their way but there’s not one size fits all solution.
Susan Freeman
And I think you mentioned building vertiports in Paris for 2024, I mean does that mean that Paris is further ahead than we are in the UK?
Duncan Walker
Yes. At the moment it is and like I said, right at the very start, much of this is political as it is technical or regulatory. They have a clear catalyst and they’ve got the Olympics in 2024 and the reason Paris is slightly further ahead than the UK is it has a well unified set of political and regulatory stakeholders so, partly because of the catalyst, partly because of some strong leadership from some of the bigger players like Ile de France which runs Paris region, like Groupe ADP who is one of our shareholders and one of the biggest owner and operators in the world, the DJAC which is the French Aviation Authority, a number of vehicle manufacturers, Airbus, there’s some big political capital with these people, many of them are state owned entities and because that group of people has come together in quite a concerted way, with a clearly defined endgame which is 2024 Olympics, let’s fly commercially, this is you know not just showing off a new piece of technology, this is let’s make it that start of permanent commercial operations, that’s driven some real momentum and you know frankly the industry is supply constrained as well, you know certifying vehicles is super hard, scaling the production of vehicles is the Tesla problem, really hard, twice as hard as Tesla because you’ve got to have these certified to every single vehicle certified to aviation standards, much harder than ground vehicles. So there’s a limitation on the number of cities that can be launched in 2023, limitation on the number of cities that can be done in 2024, 2025 and that scales over time. The vehicle manufacturers who need to make money, they need to create a market, they need to scale, you know they’ve raised all this money in the public markets, they’ve got to now go and execute on this. When they look at places where to launch and it’s not like just chuck a vehicle there and throw it in the air, you’ve got to have an airline operating certificate, you’ve got to have maintenance repair operations, you’ve got to have a pool of pilots, you’ve got to have demand generation, you’ve got to, you know, it’s super, you’ve got to have airspace integration, it’s super complicated so it’s not like you send the truck out of the factory to any city you want, you just go and get on with it, it really needs a long-term effort to get to the starting point and therefore there’s, as these individual projects gather momentum and gather credibility, gather political good will, you see a coalescence of all of the people that are in the UK system getting there. Paris has that at the moment and that’s why it’s going to probably beat London to the starting line, or the finishing line.
Susan Freeman
And with Paris it’s particularly interesting because you know they’re pushing the concept of the 15 minute city which seems to have had a lot of take up by cities around the world and they are actively doing away I think with about half of their parking spaces, you know within the city so you do wonder how people are going to get around so could electric aviation be part of the solution because not everybody, you know can walk everywhere and cycle everywhere.
Duncan Walker
Absolutely and you just need to look at who the players in the consortiums are at the moment, it’s Ile de France who run the Paris region, it RATP who are the big transportation provider there, yeah, like I said earlier, it’s not going to solve everybody’s problems, it’s not going to replace a train but it is an addition to the overall network and, you know, the electrification bit is great, the ability to solve routes without massive infrastructure 32.08 is also great so, you know is it likely that we’re going to have routes running up and down the same railway line as trains running on? No, there’s no benefit, you could get a train, it’s quicker, it’s cheaper, it’s easier, it works well generally. Are we going to have routes that are perpendicular to railway lines and that cross rivers and go round mountains and do all these complex things which have a high degree of engineering costs? Absolutely, yes, that’s the best use case. City centre to airport is a classic example, actually in London we are bit spoilt because we’ve got train lines to Gatwick and Heathrow that are very, very good. Most other cities don’t. If you ever have the pleasure of flying to Charles de Gaulle and trying to get into the city centre, it’s pretty rough, it’s sometimes literally pretty rough. Those kind of routes are great for this kind of solution.
Susan Freeman
So, I mean from what you’re saying, it’s like you were going to get commercial drones before we get autonomous vehicles driving around our cities and we’ve been talking about autonomous vehicles for you know for an awfully long time.
Duncan Walker
There are a number of bets internally at Skyports about which comes first and a number of people way more technical than me that have different views. I think the answer is probably yes, albeit the automotive industry has had a big head start, you know they’ve been going at this many, many years, you know Waymo and Tesla and others, it’s, there’s a big, big head start for the automotive industry and look frankly it’s not a race, you know if they solve the problem and some of the technology is immediately transferrable to aerospace so actually it’s mutually beneficial and really it’s also about psychology of the public, you know are you prepared… if I said you were going to get in a plane to the US and there are no pilots onboard, would you get in that plane? I’m interested in the answer.
Susan Freeman
You’re interested in the answer, well, since a lot of the air crashes do seem to be down to pilot error, I think, and I don’t really understand what keeps a plane up in the air, if I was told that it was safe then, yes I probably would rather than having to worry about whether the pilots had been attacked by a cat which happened yesterday apparently and a plane had to turn back because a cat was attacking the pilots, you wouldn’t have to worry about anything like that or the pilot having a heart attack so I think you know all in all it would be safer.
Duncan Walker
Yeah, I mean, that’s quite a progressive view actually, if you ask most people, they take comfort that there is a pilot onboard despite the pilot on an aeroplane or a commercial airliner more being a systems monitor than they are physically flying, we have a number of commercial pilots in the organisation and they are really systems monitors. People need to accept and adopt autonomy and that just takes time and you know for those autonomous driving, the leap to autonomous flying is less great than it is to say you are going up without a pilot, hope you enjoy yourself. It’s a psychological thing as much as you know there are very, very robust safety arguments about why you shouldn’t fly off autopilot on an aeroplane. There are, you know, and those are logical and they are statistically defensible but doesn’t mean that everybody wants to do it, you know, when I get on an aeroplane, do I take comfort if the pilot is nearer 60 year old, 60 years old than near 20 years old? I do, I have an unconscious bias. I look at that pilot, man or woman, and say right well you’ve probably been doing this for 40 years and you’re still there, you’ve got a lot of experience, that’s good. If I see you know a captain with no stripes or he’s got a brand new captain’s hat that’s never been worn before, I’m always making those subjective views and they’re not rational at all, they’re not rational at all but you know we’re dealing with social change as much as dealing with technological and regulatory change and that’s a big part of the potential for success of this industry or not.
Susan Freeman
It’s interesting what you say about when you look at the pilot because I tend to look and if the pilot looks too old, I spend the whole journey worrying that they might have a heart attack and if the, you know, is the co-pilot up to it so it’s sort of a different level of anxiety but it’s true. So, which markets are you looking at, at the moment? So are you thinking of you know entering into new markets? Are you aiming to become international? What do you see happening over the next couple of years?
Duncan Walker
If we are to be successful, we de facto have to be international. We have an office in Singapore, we have an office in San Francisco, we are operational in 15 cities around the world, we cannot sit here and wait for London if we want to create successes as an industry and a company. So, where’s our first few markets? I would say Singapore clearly. There’s some active cities in Australia, Middle East is very exciting, Paris is interesting, a number of cities around the US have reasonable potential partly because the manufacturers, a lot of the manufacturers are there so just doing it nearer home is easier, so yeah there’s a tonne of cities and that number of real first mover cities will probably reduce over the next year because people pin their colours to a mast and you see where the real momentum is but you can’t wait for it to come, you’ve got to be out there forcing the pace if you are going to be a genuine first mover in this space.
Susan Freeman
And so you are in quite a good position then to sort of perhaps influence, put some pressure on what’s going on over here because I mean the feeling must be, you know if Paris can, you know can go for it and you know bring in drones for the Olympics, I mean it is, must be something that we should think about because we’ve got such crowded, we’ve got so much crowded streets and I know you’ve said that the drone deliveries will probably come after the passenger flights but I mean if you drive around London nearly ever second vehicle you see is a delivery van, Amazon or you know whatever, and if we are all going to be buying online, there’s going to be even more of a problem and for London to function as a sort of world class city, we’ve got to be able to get people round the city and you know particularly at the moment with the concerns about public transport and Covid, I’m just not quite sure how it’s going to work when we all get back to trying to work from our offices.
Duncan Walker
Yeah I mean in terms of the pressure, look we’ve got a pretty good Civil Aviation Authority, they’re relatively innovative, they’ve got a great innovation department, they’re engaged in the overall arial mobility conversation, they recognise it’s coming, we’re part of a number of programmes with them, it’s a positive relationship. In terms of bringing pressure, there’s a balance for me in running this organisation in that it’s probably not the best use of my time to be fighting the hardest battles. This is a new and massive industry, it’s a much better way to create value to go to the city that really wants it, where if I knock on the mayor’s door, they open and make coffee themselves rather than saying go to the back of the queue, I don’t want to talk to you. You know, extreme examples but I tend to dedicate more of our resources, time, people, money, effort, energy to those cities which have a really proactive approach to urban air mobility because why wouldn’t I, you know, do I want to go in and fight a 500 pound gorilla or do I want to go in and join a partnership with 20 other people or 200 other people that are you know genuinely excited about making this happen in the near term? It’s an easy business decision. Having said that, it’s not that black and white, it’s not like we just sort of give up on London and go somewhere else, the business case for London is very, very good, it’s home so I want it to happen here, and we do have an engaged regulatory authority, it’s not like we’re you know, we’re not dealing in the Dark Ages here, it just happens to be slightly more progressed elsewhere at the moment.
Susan Freeman
That does make sense. Hopefully other people listening will help with the fight. I mean, one of the questions I’ve asked over the last few years is, are we doing in the UK what we need to do about regulating airspace in readiness for drone use but from you are saying things may be happening behind the scenes although we are not sort of hearing very much about.
Duncan Walker
They are absolutely happening, you are probably not hearing much about it because it’s sort of marginally boring for most people but you know, airspace change orders are not exciting things that are newsworthy but absolutely it’s happening and look, we’re not talking that London is 20 years behind everybody here, we are actively securing sites in London, we actively have partnerships with aviation authorities, with vehicle manufacturers, to launch London within the next 4 to 5 years, it is an exciting and interesting prospect that will happen and all of the enabling work is going on for that, airspace change orders, concept of operations, all that kind of stuff, it’s happening and we are actively engaged with a number of landlords because if you think about infrastructure development, once you’ve got through planning and this is going to take a long time with planning, once you’ve got through electrification because you need a lot of juice to your sites, once you’ve got through construction, once you’ve got through certification by the regulatory authorities, once you’ve got through operational readiness and testing, once you’ve got through market launch, you know that’s a three year process anyway so, you know we are already out there, actively negotiating with many landlords around London and around the UK to secure these sites. It’s not a million miles away and a lot of the background work is going on, particularly around airspace which is complex, so I don’t want to sort of leave everybody with the impression that we should give up on London and it’s not worth it. We have teams dedicated to London, teams that are slightly more progressed in other cities but not miles and you know, is it a case of catching up or doing a fast follow up, actually often it’s quite good to be a faster follower in these kind of things, there’s a lot of friction up front negotiating stuff that doesn’t have a rule book, you know we are actively writing the rules at the same time as trying to adhere to the rules. Sometimes you just want to know what the rules are and that accelerates so the J curve as the people in tech industry talk about, it’s very steep for London.
Susan Freeman
Yeah, it really is a learning curve, isn’t it and, I mean absolutely fascinating. I mean, one of the other questions I asked which seemed to sort of go into a black hole, I tend not to get an answer is, why aren’t we building all new buildings with, you know, some form of drone landing pad or, I mean obviously vertiport is something a little bit more complex but at least somewhere where a drone can land, I mean is that happening?
Duncan Walker
Less so in the UK, not no but much less so in the UK. We have way more conversations with developers, real estate companies in, funnily enough, Germany, the Middle East, Asia, saying how do I future proof my building? What should I be doing? What does this look like? How do I provide that service to my tenants? It isn’t impossible to retrofit, particularly for cargo drones but it’s way easier to think about it up front and, you know I think real estate generally is slightly slow moving in some of these things, sort of lets things happen to it rather than happening to things. It, you know, actively building stuff in many countries around the world that are doing exactly that and it’s not a bit lift, you know, it’s not… passenger vehicles is bigger, you need more space, it’s more complex. Cargo is not a big lift to be able to get it right within the base build but it’s easy to get it wrong, you know stick all the plant, don’t think about the plant configurations on top of the roof, don’t think about the access from the roof down to the ground floors other than through a boiler room, up a ladder. Those are sort of some fundamental things which can be easily dealt with at this stage and we, actually, every developer we talk to, we encourage them to do that.
Susan Freeman
It’s funny, when you talk about it, I’m sort of thinking Father Christmas and the chimney to throw the gifts down but obviously it’s a little bit more complex than that.
Duncan Walker
Yeah but look, the complexity is in recharging, it’s in communications, it’s in airspace, and you are right it’s in about taking that package from the top of the roof to where it needs to be. That’s where the base build needs to be thought through. I mean, the number of roofs in London, and I’ve stood on a lot now, that you have to go through a plant room, jump over a boiler flue, go up a ladder to get to the roof, whereas you could easily put a staircase in, if you’re designing base build you could easily put a staircase that last, or run the lift one floor higher, it’s not going to change your development appraisal but it might put you in a position being ready for the future.
Susan Freeman
It’s actually, I mean quite surprising that this isn’t integrated into development plans because with a lot of companies, you know, working towards net zero in 2030, I mean it’s only what 9 years, you know some form of drone delivery must be an important part of decarbonising, getting rid of cars.
Duncan Walker
You are absolutely right but also if you think slightly more widely than that, if you think about façade inspections, if you think about security inspections, if you think about roof inspections, you can do all of that with drones and frequently it happens and that is only going to become more prolific and it’s only going to become more autonomous and to enable to equip buildings to be able to deal with drones, is money well spent up front, you know if you had a drone on your roof of your city office building that could be deployed remotely and look we can fly our drones from anywhere in the world, I can fly our drones from my computer in Scotland with no problem whatsoever. If you enable your building to do that, you know you’ve got a dirty façade, you’ve got a cracked window, you want to do an inspection of a bolt that looks a bit loose, you want to do a security surveillance because there’s crowds gathering out the front for whatever reason, it technologically all can be done and all can be done today and to equip the building to deal with that is pretty easy actually, up front. The regulation is a different thing, the application is a different thing, the operation is a different thing, but I am surprised that it’s not more prolific. It will be and it will come and then it will be the next, you know, bike parking everyone five years ago made a huge fuss about bike parking and went we’ve got the best bike parking in London and, great, well done but now it’s standard and actually it’s a customer choice, you know as an office occupier ourselves, is bike parking and showers a key decision fact for us, absolutely yes. You know, you’ve got 20 guys and girls in the office, 16 of them probably take bikes or scooters or walk and it’s a key decision factor, you know, it’s become the norm. If you haven’t got it then you’re not part of the 48.28, I think that will happen with this over time, again the adoption rate will be very high and you know all of a sudden it will enter one of the institutions metrics like the ESG is you know top of everyone’s list as we stand today and it will be one of those tick boxes is, is your building drone enabled so I can do my façade inspections cheaper, I can do my security… and you know as soon as that hits that institutional list, every institution will have it and every building developer will be building with it.
Susan Freeman
Yes, I hope so. And at the beginning of the interview, you were talking about how intrinsic real estate is to all this innovation and everything that’s happening and we talked about you know drone making buildings you know fit for drones. Is there anything else that people in real estate should be thinking about in terms of this coming sort of electrification of aviation of and new ways of getting things about and getting people about?
Duncan Walker
Yeah, it’s not just the electrification of aviation, it’s the electrification of everything and the automation of everything and where we see the most progressive developers is they’re not thinking about the roof and insolation the ground, they’re thinking about the building as integrated thing. How do you integrate mobility into your building? How do you deal with autonomy? How do you deal with a world where all taxis are autonomous and need recharging? How do you deal with a world where all our vehicles are electric when they are coming to park at your building and what’s the electricity demands that that’s going to place on the building? How do you deal with a world where everything is shared? Where the concept of car ownership – which will happen within the lifetime of buildings that are being build today – how do you deal with a world where no one owns their own car or their own bike or their own roof top or their own drone? Is the building equipped to deal with that? Is it providing the services which people want, which is the ability to recharge, the ability to not stand in the rain whilst you are waiting for your autonomous vehicle, the ability for your autonomous vehicle to be cleaned? Is the building equipped to dealing with that or is it going to be, you know the old piece of wattle and daub that is unfunctional because the world has moved and infrastructure which is highly capital intensive, or buildings which are highly capital intensive and illiquid and immobile, takes a long time to catch up with that.
Susan Freeman
Yeah, and particularly so when we really are all fixated with you know decarbonisation and you know moving in that direction, it just seems to be a subject that somehow doesn’t, you know, doesn’t come up in the way that it should and I don’t know why that is really.
Duncan Walker
Just put yourselves in an occupier’s shoes, if a developer wants motivation it’s usually financial, right? Put yourselves in an occupier’s shoe. Big occupier, city of London, has an office building and you say I have a fully electrified office building which is carbon neutral and has all of these environmental benefits versus the exact same office building next door, your decision as an occupier is made because whatever industry that occupier is in, they are directionally going towards carbon neutrality and environmental friendliness which is fantastic, you know, do I go and rebuild my factory that has all sorts of emissions and high capital costs or do I just take the office building A, not office building B because I can prove that I’ve saved X hundreds of tonnes of carbon. It’s, for me it’s obvious economics, you know put aside all your environmental responsibility, put aside all of your future proofing, it’s straight up sensible from a capital allocation perspective to invest in these things.
Susan Freeman
Yes that makes a lot of sense. And, I have to say, until we started this conversation, I hadn’t realised that things were moving quite as quickly as they are so that is, you know that’s particularly interesting. And what do you do in your spare time assuming you do have some spare time? I mean, do you fly?
Duncan Walker
I’m actually one of the few people in the organisation that doesn’t fly. We have a tonne of pilots here which is great, we’ve got acrobatic pilots, private pilots, commercial pilots and all good. No, I’m not an aviation person, I mean I’ve sort of got a reasonably good fundamental basis now having been in it three or four years but I’m not an aviation person, I’m more focussed on the ground, things with two wheels and cycling around, running around with three kids and, yeah, more ground based activities at the weekend.
Susan Freeman
Well, I have to say it’s great to have somebody that comes from a real estate background who’s doing something you know so ground-breaking and you know really incredible, you know as you said at the beginning when you started on this, people were you know saying you know what? Why? You know, you’re a lunatic so, that’s really…
Duncan Walker
They may still be right.
Susan Freeman
I don’t think so. I don’t think so. No, I’m with you and I have to say that drones are something that is you know particularly close to my heart and it’s come up a number of times in other podcasts so, Duncan, thank you so much and you know I will be sort of tracking progress and I look forward to my first drone taxi ride with some trepidation.
Duncan Walker
That’s an interesting 54.11. Thank you for your time, I really appreciate it and that’s the offer I always make to landlords is if we put a vertiport on your building, I can make sure you have one of the first rides and I’d say 70% are super excited about it and 30% re-evaluate whether they want a vertiport or not. But that’s what it’s all about you know, it’s about proving the concept, it’s about getting into the public eye and when that happens, it will scale very, very quickly.
Susan Freeman
Fantastic. So, Duncan, thank you so much for your time.
Duncan Walker
A pleasure.
Susan Freeman
No, that’s been great, thank you.
Duncan Walker
My pleasure.
Susan Freeman
A huge thank you to Duncan Walker for updating us on what’s going on in the world of drones, a subject very close to my heart, and when we might expect to take our first drone taxi ride which is a lot sooner than I thought it was going to be.
So that’s it for now. I hope you enjoyed today’s conversation. Please join us for the next PropertyShe podcast interview coming very soon.
The Propertyshe podcast is brought to you by Mishcon de Reya in association with the London Real Estate Forum and can be found at Mishcon.com/PropertyShe along with all our interviews and programme notes. The podcasts are also available to subscribe to on your Apple podcast app, and on Spotify and whatever podcast app you use. Do continue to subscribe and let us have your feedback and comments and most importantly suggestions for future guests and of course you can continue to follow me on Twitter @Propertyshe and on LinkedIn for a very regular commentary on all things real estate, Prop Tech and the built environment.