Learnings of the Corona Crisis for the Real Estate Industry:
Eight leaders, four key trends
We asked eight personalities from the real estate industry how they and their companies are standing up to the Corona outbreak. The response was overwhelming and clearly shows that the real estate industry is standing together in difficult times.
Summing up the learnings from these eight real estate leaders, we identified four key trends:
Uncertainty as the biggest challenge
“Should the crisis last longer or even get worse, it can be devastating to wait any longer. Conversely, switching too early to the survival mode could stifle a coming upswing.” Jan Eckert
The greatest challenge lies in the uncertainty about the further course of the pandemic and the associated strategic and operational decisions. Future developments will affect business continuity.
Takeaway: Good crisis and risk assessment and management are a big step forward.
Human qualities in the front line
“People only know what they had, when they lost it. All that interpersonal interaction, discussing topics together over a quick espresso or a long lunch is then missing. The situation makes what used to be considered normal and every day appears in a new, brighter light.” Peer Kocur
The situation showed that despite difficult conditions the interpersonal exchange is more important than ever.
Takeaway: A crisis can reinforce and improve emotional closeness, solidarity, communication and team spirit, which can help to achieve incredible successes in difficult times.
Organisational strengths showed up
“The crisis was a huge catalyst for digitisation in the real estate industry – it is now no longer a question of will, but rather indispensable for the survival of all companies.” Peter Staub
Digital and decentralised organisational structures did smoothly switch to home office without losing productivity.
Takeaway: Already recognised opportunities of digitisation pay off. Thanks to digital processes, companies were able to secure business continuity or even strengthen efficiency.
“Fortunately, even before the crisis, we had set ourselves the goal of pushing the use of new technologies. Of course, we are still far from reaching our goal and we have also noticed some stumbling blocks, for example in terms of process optimisation. But we are on the right track.” Marcelo Collins
A crisis reveals the weakness of an organisation but at the same time indicates the potential for innovation and improvement.
Takeaway: The opportunity lies in digitising even more processes to unlock hidden opportunities: Employees need to travel less, new innovative digital solutions will evolve as and a stronger team sense can develop.
Here’s a shortcut to the eight interviews of the “Standing up to Sars-Cov-2” series. A quick summary of each interviewee points out the most important statements.
Jan Eckert sees the greatest challenge for his company in the uncertainty about the further course of the crisis and the associated strategic and operational decisions.
If the crisis lasts longer or gets worse it could be disastrous to do nothing now. Conversely, switching to survival mode too early could stifle a coming upswing. What would have been right can only be judged in retrospect.
“The helpfulness and motivation of our employees are certainly positive, as they try to give their best every day under difficult conditions and thus manage to achieve success even in these difficult times.”
Jan Eckert expects that travel restrictions will still be valid within a year’s time. For an international group like JLL, this means that instead of business trips, more and more telephone conferences and workshops will be held.
Read the whole interview here.
Marcelo Collins invests hope in digitisation. At Viva Real, he already recognized the opportunities of digitisation long before the crisis. Thanks to digital processes, he was able to transfer daily work quickly and easily to the home office.
“It is exciting to realize that in a crisis like this the weaknesses of our processes come to light, because it shows us where we need to improve”.
Marcelo Collins also sees opportunities in the crisis. For example, an SME like Viva Real, could prove that it is already a big step ahead in terms of digitisation in the real estate sector and could show decisive advantages for customers.
In his view, the most important preparation for the time after Corona is to remain alert and agile as a company and to learn to better assess and deal with risks.
Read the whole interview.
“Discussions in which, for example, floor plans needed to be optimised (renovations, project developments), where it was possible to sketch with the pencil in the plan earlier, become challenging.”
Thanks to an existing risk management and crisis unit, the Migros-Pensionskasse was well prepared for an exceptional situation such as the Corona crisis, says Peer Kocur. Within the Migros Group, a crisis management team with representatives from the various divisions had initiated the necessary measures. Thus, it was possible to maintain all operations.
“At no time in the past have the different markets been so interwoven as they are today. The resulting dangers of the further course of the pandemic and the economic impact on our tenants are very difficult to assess.”
Finally, Peer Kocur gives exciting food for thought for long-term changes that the crisis could bring about:
- Will it take long business trips if it also works via web conference?
- If it is possible to work outside the office, why not give it up?
This would enable companies to streamline their fixed costs.
Read the interview.
Pom+ had already made corporate digitisation a priority long before the Corona crisis, says Peter Staub. Within 24 hours, they had moved all 86 workstations to the home office, re-managed the telephone systems and organised all exchange meetings online.
“I am pleased that the spirit in the company remains high.”
The last few weeks have shown that the changeover to a virtual work environment is most straightforward when there is already a basis of trust. This confirmed to him that one should take care of client and customer relations and give great importance to personal exchange.
“The crisis was a huge catalyst for digitisation in the real estate industry – it is now no longer a question of will, but rather indispensable for the survival of all companies.”
Peter Staub expects that infrastructure and operations management will become more significant in the future. Presumably, the topics of land use and spatial planning will increasingly come into focus in the future, now that everyone has spent many weeks in their own four rooms.
“True to the motto of Winston Churchill: “Never let a good crisis go to waste.”
The whole interview.
“In this new decade, the real estate and construction industries will undergo some profound changes. We could see this crisis as a boost for our old, efficiency-driven industry.”
Julien Fersing, recommends spending more time evaluating internal processes and looking for alternative solutions. For SWISSROC, for example, it became evident that most meetings can be held in less time via conference calls by focusing on clear results.
“I also believe that we should evaluate our expenses more often and try to make savings, regardless of the cash flow situation. At the same time, more investment in research and development is the key to continued competitiveness.”
Julien Fersing believes that COVID-19 will strongly encourage the real estate industry to introduce new technologies such as BIM. This would make it much easier to work on a project remotely.
To the interview.
Patrick Schmid hopes that the clients of ImmoSparrow -to a large extent real estate agents- could return to some kind of normal business as soon as possible. This is only possible, however, if people have an increased desire and also the possibility to tackle a real estate transaction again, be it on the buyer or seller side. Ultimately, the greatest challenge would be the uncertainty of the population.
“Every crisis opens up opportunities and can unleash undreamed-of forces. So, in cooperation with a partner, we were able to develop and launch a new digital product in a very short time.”
What will the crisis change? The crisis will bring to light very clearly what can and cannot be digitized. Areas that cannot be digitized will suffer a lot now, but will recover. In industries that can be digitized, there will be a shift. Patrick Schmid expects that new solutions will increasingly emerge for the latter that combine the important personal contact with digitization.
Read the entire interview here.
After the Sars-Cov-2 outbreak, Markus Stadler noted that the society’s need for information on property-related issues (such as value retention, how the market is developing, etc.) had increased. The demand of B2B customers for web-based products, as well as for analyses that contribute security and fact-based info to the public discourse is very high. This trend applies to all locations, i.e. in Switzerland, Germany, France, Austria and Japan.
“One month after the lockdown, there has been a significant decline in rental and sales offers on online platforms. Uncertainty and more difficult marketing situations are probably the reasons for this. Solutions like ours, which can be used digitally, can be particularly helpful for e.g. brokers in this situation”.
PriceHubble relies on a dynamic product development process that allows it to quickly respond to possibly changing requirements and implement them. Markus Stadler also sees that a crisis can even intensify and improve the team spirit:
“In our view, those who successfully survive a crisis as a team develop an even stronger sense of togetherness – we build on this dynamic.”
Check out the whole interview.
Roman Schneider sees the greatest challenge in maintaining the right balance between further expansion and development and a course of action geared to a longer period of economic weakness.
“I think many of our customers and prospects feel the same way, and we are now seeing this trend in lead generation, for example. Nevertheless, we must not lose entrepreneurial confidence. As PropTechs we can help the real estate industry to take the step into the “new normality” – a horrible term – and to seize the existing opportunities.”
Many companies would now increasingly rely on e-commerce.
The ongoing development of “disintermediation” is likely to intensify as a result, he said, which will additionally affect retailers who are already under pressure and thus increase the pressure on retail space.
- In the area of corporate real estate, the question will arise as to what extent it will be possible to continue with open office concepts.
- After all, the collective experience that home offices do work will have a significant influence on both the demand and the quality of space.
- After the experience of spending three months with the whole family in a city apartment, there will probably be an increased demand for more space and higher quality on the apartment and house market.
Read the whole interview with Roman.
Thanks a lot to all industry experts for these interesting insights and the great support!
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