If you look at current developments in the real estate industry, you will notice one thing above all: change. Hardly a stone is being left unturned. Processes are being rethought and many areas are in the midst of a digital transformation process. We know from numerous other sectors of the economy that these changes are creating space for something new. There are opportunities to benefit in the long term and become a shaper of a new, digital real estate world.
Development cycles paralyze and opportunities are not exploited
The development is not new, and the real estate industry is not the only sector that is confronted with these drivers of transformation. Nevertheless, the challenges facing the sector are very individual. First of all, there are the long planning cycles, which run counter to the rapid, agile change of the digital world. Innovations with a development cycle of just a few months are difficult to fit into an industry that is experiencing a constant forced deceleration due to long planning and approval processes. Changes, developments and innovations that occur during this long phase must first be implemented in a complicated manner. Usually with high costs and a lot of effort.
The way out of this paralysis is to speed up approval procedures, as the new government is now partially planning to do, but above all a fundamental change in attitude: investors, real estate developers, administrations and the construction industry must become more open to change and actively incorporate innovation and new ideas into their planning. Some market participants hope that investing in external start-ups will provide them with additional expertise and access to innovative market models. The development of their own so-called corporate venture, which can drive this acceleration, is a possible way out and offers a great opportunity. Established companies have a decisive advantage over young start-ups: they can develop new business models along their value chain and build on existing assets. Those who own the relevant parking spaces can use sensors to offer automated parking space searches for car users more quickly. Those who digitize the building management and maintenance of their properties can process orders faster, reduce administrative costs and gain time for other activities. In this way, your own assets quickly become an unfair competitive advantage that needs to be exploited.
Stay hungry and learn from other industries and digital players
Digital transformation also requires cultural and organizational adjustments. The introduction of digital units and innovation teams, agile project management and interdisciplinary structures form the basis for successfully coordinating digital projects. The real estate industry must therefore remain hungry. Many companies have experienced too many good years. Success has become too self-evident. Oversaturation makes you sluggish. If you only focus on your current business, you run the risk of losing sight of the changing problems of customers and users. This is precisely the crucial point: the customer must always be at the center. Relevant problems must be continuously solved for them. This is how the big digital players are leading the way across all sectors.
Convenience beats everything, including trust and existing business relationships, which is remarkable. To understand this, it is enough to look at other industries, such as finance, which relies heavily on customer trust. Nevertheless, neo-banks have managed to steal customers away from the big banks - with easily accessible solutions and user-oriented thinking and offerings.
What counts is speed, not perfectionism
It is also important for the real estate industry not to rest on the laurels of the past, but to develop new business models and boldly move into a new future. For an industry that thrives on long development cycles, it is important to become faster, to try things out and to proceed with a start-up mindset that does not think in terms of solutions that are one hundred percent ready, but can always be adapted to new opportunities. Figuratively speaking, we have to learn to live with semi-finished products.
The good news: the foundations are in place! The assets that the construction and real estate industry has are great: for example, a broad portfolio of spaces and buildings and good access to landlords and users. Many new things can be built on these traditional and existing foundations. One thing is certain: the transformation to businesses in which "digital" and "sustainability" are the value drivers is in full swing. We now need to show courage, be quick and seize the new opportunities.
