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The economic situation is uncertain, the outlook difficult to forecast - and geopolitical upheavals are shaping the global markets: this is also affecting the real estate sector. In view of rising interest rates and higher commodity and energy costs, combined with increasing investment requirements due to ESG regulation, the sector is under pressure.

How do companies strengthen efficiency and resilience in uncertain times? This is the topic of the new Real Estate Bulletin 02/2023 entitled "Performance factor back office". Our experts provide suggestions, examples and concrete tips for optimising the performance of selected back-office processes.

Real estate industry: Why the back office is now also coming into focus

The good news in advance: According to the federal government, there will be no recession in 2023. This confirms the scenario of a "soft landing" of the real economy. However, interest rates are still expected to rise. This not only makes refinancing more difficult. The transaction volume on the market in 2022 has collapsed compared to the previous year - for residential real estate by as much as 72 percent.  

Equity-strong investors now have advantages. For them, highly interesting investment opportunities may arise in 2023. Modern, ESG-friendly properties in good locations are particularly in the spotlight. Our experts emphasise that returns are no longer generated by the time factor and low financing costs, but by professional, client-oriented asset management.

The past very successful years have led to strong growth of real estate investors and companies. This makes it all the more important to actively manage costs and improve performance and resilience as revenue growth flattens. Back-office functions have mostly only grown reactively with the value-creating core business activities - and are now also coming into focus.

Digital applications are a key factor in cost savings

In the Real Estate Bulletin, our authors explain how potentials can be identified and raised with the Target Operating Model. The multidimensional model does not focus on individual departments or functions, but on interdependencies within the company. It helps to identify weaknesses in accounting and controlling, among other things, and makes interconnections clear.

Digital applications are a significant factor in increasing efficiency in the back office. The bulletin describes how real estate analytics and business intelligence help to make operational and strategic decisions based on data and how technical solutions simplify contract preparation and management. Digital tax processes create transparency and security for real estate fund and asset managers.

It also becomes apparent that an internal reorganisation can also ensure solvency in a tight financial situation. Various steps are helpful in generating liquidity under pressure to act, from outsourcing loss-making service areas to bundling previously decentralised tasks. The Bulletin uses an example to show how status quo analysis, target definition and tool-based implementation can succeed and make companies future-proof.