"Digital tools enable us to save time"

The real estate industry has been doing well for many years. Now the framework conditions have changed. What effect will this have on digital transformation?

First of all, I would like to point out that I am looking at these issues primarily from the perspective of existing properties – and in my view, there are different influences and effects here. High energy prices, for example, have given digitalisation another real boost in terms of creating transparency in energy consumption and CO2 emissions – and this has had a greater impact than the regulatory measures that were introduced several years ago. Taxonomy and reporting requirements certainly created an immediate need for clarification, especially in the institutional sector, but beyond that, they triggered little activity. The aspects of cost and scarcity, on the other hand, have had a very strong push across the board on what is happening in the digital environment of energy efficiency and thus also CO2 reduction.

So digital solutions for decarbonisation have benefited?

In my view, the decarbonisation of buildings always starts with digital solutions, from creating transparency and monitoring to operational control. Rising energy prices have also given this a huge boost in areas where people were previously very hesitant. There is now a very strong will to make decisions and move forward.

What influence do higher interest rates and other factors such as inflation or rising construction costs have?

It is nothing new that high interest rates are poison for the tech industry, because everyone who has set out on this path in recent years is suddenly facing or will face completely different financing difficulties. We will see a shake-up in the industry, which is of course a shame because this sector is a hotbed of creativity. There are two reactions to the overall higher costs, although I believe the second will prevail. The first is that companies will scale back their digital investments somewhat. Ultimately, however, everything that promotes efficiency will prevail and this will receive another real boost.

Since construction costs are less of an issue for us, I would look more at building operations in this context. Here, too, digital solutions, tools and approaches offer enormous potential for efficiency gains. For example, we have introduced a system that we call Asset Information Modelling, or AIM for short, based on BIM. This gives us a really good overview of all our assets and allows us to better manage purchasing services and areas of operation, for example.

What other key drivers of digitalisation do you see?

The shortage of skilled workers is a huge issue. Following the merger with Gegenbauer, we now have 40,000 employees. So, of course, how to manage personnel growth is a daily topic. We can train more apprentices and recruit staff abroad, which we are doing, but that will never be enough to compensate for the shortage of skilled workers. In fact, the shortage is likely to get worse. In our industry as a whole, in construction, but especially in building operations, the standardisation and automation of processes, as far as possible, is therefore the best way to overcome the shortage of skilled workers.

On top of that, there is the issue of decarbonisation in physical work. The low-hanging fruit that we can pick in buildings over the next three years without complex measures is relatively easy to achieve. But in three to five years, we will be heading towards labour-intensive measures, where technology will have to be replaced on a large scale. By then, digital solutions must have led to significant efficiency gains so that we have the people we need.

So digitalisation is not a result of the cheap money of recent years, but had very heterogeneous, yet concrete reasons. And that means there will be no way around digitalisation in the future?

That is a takeaway for us and for the industry: when it comes to digitalisation, things only move when the pressure is really high. We have discussed energy efficiency solutions with our customers, where the focus has always been on ROI. This has improved dramatically over the last year. On the other hand, topics that I believe are still progressing very slowly, but which are also part of digitalisation in and around buildings, are convenience issues. For many of our customers, these fall into the ‘nice to have’ category and are therefore more likely to be dropped in difficult times. The situation is different when, for example, booking systems can be used to reduce space. The pure convenience concept, which was much more in focus two or three years ago, even in solutions available on the market, has receded somewhat into the background. On the other hand, everything related to ESG, ESG reporting, etc. and that increases efficiency is now considered a must-have and future-proof.

And that applies both internally and externally. I already mentioned the need to manage internal resources carefully and become more efficient through digitalisation. Remote monitoring is an important keyword here. It allows us to derive sensible deployment planning. At the same time, we can also solve ESG-related issues. For example, where should the first investments be made in the portfolio, or what might different use cases look like? There is still a tremendous amount of potential here.

This argues in favour of breaking down the artificial value creation barriers imposed by the industry, for example between the owner and the person who has access to the data, such as the facility manager...

Contracts alone usually stand in the way of better exchange and a results-oriented approach. They often leave no leeway for service providers to deliver their services. This is, of course, the death of all creativity and digital solutions. Only when you can approach things in an output-focused way, when only the result counts, does innovation automatically follow. Of course, there are also companies that are already further ahead and are embracing this approach.

In your opinion, which digital solutions and approaches are particularly suitable for moving the industry forward?

That depends on what you define as the goal. If I start again with the most obvious – the decarbonisation targets – we are strong advocates of introducing digital solutions for controlling building technology wherever possible. Using a simple digital tool, we were able to achieve CO2 savings of around 35 percent. The costs are negligible in view of this – for use on around 22,000 square metres, they were in the five-digit range. Instead of taking advantage of these opportunities – in both senses of the word – people are being scared into thinking they need to make huge investments. But with good digital solutions and little money, we can now buy ourselves time to develop sensible strategies. These will look very different, which is why we need this time.

We must also bear in mind that it is not usually real estate experts who decide on strategies and measures. When it comes to the vast majority of commercial properties, those responsible are extremely uncertain about where to invest how much capital expenditure. Politicians are contributing to this uncertainty. Simply having more time, for example for in-depth analyses, makes those responsible feel much more comfortable. And AI will naturally play an increasingly important role in these analyses, as well as in the automatic control and monitoring of building technology and in contract and purchasing analyses, delivering enormous added value.

It is traditional for us to ask this question at the end: In an ideal world, what problem in your company, your organisation and/or your private life would you like to see a (digital) solution for?

Professionally and privately, this concerns the increasing volume and complexity of the various solutions we have to deal with. Whether in my private life, at home or as a company, I don't really want to work with dozens of apps; I'd much rather integrate everything. I want to be able to easily control everything that makes my life easier. When I think about mobility, for example, I can use one app to rent a scooter, another to rent a bike, and another for my train journey, etc. It would be nice to have an integrated solution. This applies to all situations in life and can also help our customers in the future to simplify things rather than make them more complex. Ultimately, this is also the approach of integrated facility management – one contact person for all concerns.