GREETINGS FROM EXPO: BACK TO ASSET MANAGEMENT
After three years’ absence from physical face-to-face events and exhibitions I thought that if there is one event for us to attend this year, it is Exporeal. Just to see where the world is standing and where the German Real estate industry is heading.
After good and packed three days in Münich my synthesis is clear: Back to asset management. Let me explain why.
To put it short, the RE investment community has had extraordinary last decade(s). Most of the industry has been extremely successful for quite some time. And this is mainly due to an exceptionally long period of extremely low interest rates. To put it a bit provocatively, anyone can have succeeded in the zero to low interest rate environment. Now the game has changed – and quite dramatically.
Still recovering from the aftermath of Covid with persistent vacancies, Putin’s decision to conduct a full scale war in Ukraine has led the world yet to another crisis. With increasing inflation and interest rates and soaring energy costs the good old days of the institutional real estate investment management industry are over. (And to be clear, as a citizen of Finland this is not to belittle the humongous tragedy in Ukraine and for me it is crystal clear who the bad guy is)
With regards to the RE industry, now it is time to start work again. The key success factor might have been the financial engineering but now one cannot escape the fact that the asset is where the focus is – and should be. The performance of the individual assets and their aggregated return on SPV level will distinguish winners from the losers.
And this is where Asset management plays the decisive role. Such boring and everyday operative things, like vacancy, wault, opex, rental levels, rental adjustments, arrears, capex, tenant retention and satisfaction, ESG, budgets, service agreements etc. are back on the table – if they ever left it. However, these are just metrics and conceptions. The real impact will happen in daily operations on the asset level with real world stuff. Decisive for that to happen is for Asset management to collaborate with Property management – from human to human.
And for this to happen one cannot rely on Excel spreadsheet as the main management tool and e-mail as the only communication tool.
However, since most of the valuable RE data is residing in local legacy Property management systems (in respective market areas), most of the time we face a problem, how to capture and update an aggregated view of all the assets in different geographical locations, while the data is stored and maintained by the local service provider in a local system.
This is where applications like Assetti come handy. We have created numerous integrations to local RE systems across Europe, whether a Financial admin / ERP system or pure PM play. These include e.g.
- ixHaus, DATEV, SAP, Haufe PowerHaus
- UNIT4, Vitec
- Procountor, Netvisor, Fivaldi
By connecting to underlying legacy systems one keeps the view of the assets up-to-date and by giving property managers an access to Asset management platform one keeps everybody on the same page how things are on the asset level. This leads to numerous operational benefits, such as
- better and more frequent follow up of the business plans
- more detailed view on operating expenses (e g energy)
- speedier reaction to deviations from Planned to As-Is
- improved budgeting – and most of all –
- improved collaboration between Asset and Property management.
So to conclude my three days at EXPOREAL, as I stated in the beginning of my writing, it is back to asset management.
If you are interested in how Assetti can help you and your company back to Asset management please contact us at your convenience or book a demo to see it yourself.