Today the world invests around $3 trillion in infrastructure each year, but as we strive to deliver the United Nations’ Sustainable Development Goals in developing markets, and upgrade the infrastructure of developed markets, that level of spend is expected to double or triple over the next 10 years.
The Real Estate, Infrastructure and Construction sector is continuously confronted with important market trends which require continuous transformation. The health crisis that started in 2020 accelerated ongoing trends such as digitalization of business processes but also forced real estate owners and developers to rethink their real estate strategy to take into account new ways of working. The war in Ukraine led to major disruptions of the supply chain and the rise in interest rates during the past months disrupts thoroughly the investment climate.
On top of that, regulatory changes, increased reporting obligations and competitive considerations call for a strategy around sustainability and circularity of real estate portfolios.
At KPMG, we have acquired experience, knowledge and insights across the Real Estate, Infrastructure & Construction sector through delivering tax, legal, accounting, audit, and advisory services. KPMG is involved in every stage of the investment property and investment lifecycle and offers experience in working with all levels of stakeholders throughout the real estate industry. Whether your focus is local, regional or global, we can provide you with the right mix of experience to support and enhance your needs and ambitions.
Contact us to explore how we can work together to help connect the world, build prosperity, reduce poverty, and create sustainable quality of life.
Challenges & trends
M&A landscape
The M&A landscape has changed, with issues such as diversification and globalization, increased interest rates, pressure on profitability and distressed sales having an impact on the Real Estate and Construction sector.
Regulatory forces stress the industry
The implementation of new or increased regulations and intrusive supervisory scrutiny – for example, on data privacy, ESG and urban planning – are changing the regulatory landscape for the sector.
Tax and geopolitics
The tax landscape is in continuous evolution with the fight against tax evasion leading to the introduction of tax transparency and fairness rules such as DAC6. The new BEPS 2.0 rules introducing a global minimum tax of 15% will also have a great impact on the sector.
Changing customer preferences due to health, energy, and environmental crises
COVID-19, climate change and increased social values influence customer behavior and expectations, impacting their real estate needs. Moreover, the energy crisis has put a bigger focus on energy efficient buildings, as buildings are currently responsible for more than 50% of the global electricity consumption while generating 40% of global CO2 emissions. This will place the focus more on new customer engagement and service models and technology-enabled buildings.
Data driven operational efficiency and decision making
With digitalization at the heart of this period of rapid change, the sector must consider key areas such as data value extraction and data management, data security and cyber threats, increased traction of quantitative investment strategies and digital labor to shape the digital and sustainable real estate & workplace transformation. Data that’s being captured from new technologies, for instance within the Internet of Things (IoT), is allowing granular level observation, improving decision making especially in real estate portfolios.
Sustainability goes mainstream
Shifting demands of customers and stakeholders have forced the sector to consider issues such as social values and responsible investing. Re-examining business models to include circular economy practices should also be considered. The race to net zero will force the real estate industry to have carbon neutral portfolios by thinking of green and less energy consuming buildings, green mobility location strategies, community projects and disposal/retrofitting of non-sustainable assets.
Digitalization and the future of work
On another note, digital solutions for the connected workplace, leveraging AI and data analytics will guide strategic discussions with business leaders. Furthermore, developing new workplace strategies, shaping the hybrid way of working and improving customer experience will contribute to attracting and retaining talent.
Key Services involved in the Real Estate, Infrastructure & Construction sector
- Legal advice and assistance with permit applications
- Administrative and judicial litigation
- Facilitating negotiations with authorities
- Risk consulting
- Flexible working impact assessments
- Technology advisory: Operational efficiency through automation, AI and machine learning
- Smart cities, Public Procurement & Public-Private Partnerships
- Assessment of DAC6 rules on Real Estate deals
- Assessment of impact of BEPS 2.0 rules
- Impact assessments and tax (re)structuring
- Tax & accounting advice and compliance
- Real Estate finance
- Leasing, property & asset management contract negotiation
- Funding & Finance
- Financial, tax, legal and operational due diligence
- Negotiation and structuring of deals
- Merger & acquisitions
- Governance & planning
- Project Management
- Innovation Strategy
Data driven operational efficiency
- Asset management: data integration, analytics and visualization
- Decision-making modelling and portfolio planning
- Operational efficiency
- IT strategy & implementation
- Digital & Technology transformation
- Business & Operating Model Change
- Shared Services & Outsourcing
We advise Real Estate, Infrastructure and Construction clients on a broad spectrum of issues as well as through the following integrated solutions
We believe the future enterprise will be Connected. Powered. Trusted. Elevated.
Connected. Powered. Trusted. Elevated. is our definition of a digitally transformed organization. One that is connected, aligned and engineered around the customer. One that is powered by modern technology and agile business practices. One that is trusted by all its stakeholders from customers, employees, suppliers, investors and regulators.
Connected
KPMG Connected Enterprise for Real Estate is our approach to customer-centric digital transformation for the sector. It aligns your business around your customers to create a seamless, agile, digitally enabled organization that delivers better experiences and new levels of performance and value – at scale across your front, middle and back offices.
Powered
KPMG Powered Enterprise is KPMG’s suite of services to transform your back-office functions. We bring future proof target operating models using KPMG best practices, processes and pre-configured SaaS (Software as a Service) platforms, along with advanced technology assets, for optimized processes, governance, KPIs (key performance indicators), people skills and data.
Trusted
KPMG Trusted brings together risk and regulatory services that build trust and confidence in the business and the digital transformation journey. It helps ensure that businesses can predictably navigate risk and regulation – and deliver on the promise to keep customer data trusted, safe and secure. Trusted fosters the confidence of your business and your stakeholders for continued organizational resilience.
Elevate
KPMG Elevate identifies and quantifies value-creation opportunities. We help businesses target and capture value using a data-driven approach – confidently helping to achieve measurable improvements to increase profitability and performance. We focus on what needs to change for an organization to become a successful, modern, high-performing business.
