Real estate industry ready for digitization.
The latest ZIA study* confirms the need for digitization with concrete figures
The fifth study by ZIA (Zentraler Immobilien Ausschuss e. V.) and EY Real Estate (Ernst & Young Real Estate GmbH), published in 2021, clearly shows how great the potential and the willingness within the real estate industry is to adopt and use digital innovation. Around 250 employees from both private-sector and public-sector companies with a connection to real estate were surveyed. These gave a personal assessment on the topic of digitization within the real estate industry. Here are the key findings:
Real estate industry is investing more in digitization.
Spending on digitization measures continues to rise. 27% of the companies surveyed invest more than 5% of their revenue in digitization. In 2018, the share was at 14%. Around 29% of the companies surveyed invested between 1% and 3% of their total revenue in digitization measures in 2020. Comparing the investments of recent years, the trend is clearly toward higher investments in digitization measures.
92% of companies see potential growth in the PropTech market.
At the same time, around 72% point to a dissolution of the boundaries between PropTech and the traditional real estate industry. In the German real estate industry, the term "PropTech" is closely associated with the general digitization of the sector. "Property Technology" is a collective term for innovative developments in the real estate sector. With the vision of making the industry sustainably more efficient through technological, digital progress. Digitization leads to generation of useful data and information.“ 98% of respondents agree with this statement. Still associated with a high level of agreement are topics such as higher user satisfaction, the resilience of decisions and the associated opportunities to develop or expand business models.
Optimization and automation of business processes.
It is undisputed that the use of digital technologies and applications leads to an increase in the efficiency of business processes. 97% of respondents see this as an important area of application. An equally high effect is seen in possible standardization and in the value-creating use of data and information (95% in each case).
60% of respondents are actively pursuing a data strategy.
Another increase: while in 2019 around 51% of respondents still said they wanted to share their data with competitors to generate added value, in the new study 59% have already recognized this potential.
The value of data and information is already embedded in our corporate culture.
Our company pursues a stringent data strategy.
We would share our data with competitors if we could gain a broader database from it.
Data analytics is still a black box for us.
So far, data analytics is not yet mature enough.
We have the appropriate know-how to achieve efficiency gains with data analytics.
Our company actively uses data analytics.
- I agree
- I rather agree
- I rather disagree
- I disagree
COVID-19 increases the need for action.
Many companies confirm that the ongoing pandemic has highlighted internal digitization deficits (55%). In general, it is evident that the German real estate industry is intensively addressing the topic of digitization in the context of the Corona crisis.
Digitization for sustainability: Reducing the energy and resource requirements of real estate by means of digital technologies.
In the meantime, various application examples (such as the use of sensor technology to regulate the indoor climate) have proven that savings can indeed be achieved. 79% of participants expect a further reduction in energy and resource consumption using digital technologies. Data transparency can increase the chances of successfully integrating ESG criteria.“ This statement was agreed to by 93% of respondents. The integration of ESG (Environment, Social, Governance) standards is high on the agenda of all real estate players. A strategy for integrating ESG criteria, which includes the use of digital solutions, is pursued by a total of 62% of the companies surveyed.
Outlook: high potential for digital technologies.
In general, the real estate industry is characterized by an optimistic view of the potential of new technologies and applications. This includes mobile devices and cloud technologies as well as digital platforms, data analytics/data mining, smart contracts and the Internet of Things (IoT).
Our CONCLUSION from the study:
The real estate industry is ready to take advantage of the opportunities offered by digitization and to make the corresponding investments and structural changes to do so. At the same time, the need to contribute to the achievement of climate targets and the fulfillment of ESG criteria with the help of digitalization is recognized. The founding of 202up GmbH is the logical consequence of these challenges. Our vision is to make the real estate industry more digital, efficient and sustainable. We are actively facing these tasks and are committed to overcome upcoming obstacles and hurdles.