How real estate companies can optimise their front and middle offices

Real estate companies are currently operating in a challenging environment. A recession is expected for 2023 with negative impulses for the construction and real estate industry, the interest rate situation remains tense, financing margins are narrowing and investment volumes on the transaction market remain low. In addition to these macroeconomic developments, the real estate industry is confronted with new requirements for ESG reporting.

In view of these multiple challenges, real estate companies must adapt their corporate strategy, business model and target operating model (TOM) in order to become more cost-efficient and secure their earning capacity in the long term.

An important aspect of this is the optimisation of performance in the front and middle office. This is the subject of the current issue of the Real Estate Bulletin, because in our view, the corporate functions in these two areas offer a lot of potential for optimisation.

A quick return to the exponential growth of the past years is highly unlikely. Significant increases in value can no longer compensate for costs caused by inefficiencies or insufficient digitalisation. This means that the performance of the front and middle office must now be analysed and optimised with suitable measures. 

In the articles in the Real Estate Bulletin, the experts from KPMG and KPMG Law show starting points and recommendations for action with which front and middle office functions can be sustainably improved. One important lever here is digitalisation.

It describes how a continuous improvement process can be implemented to increase efficiency, effectiveness and competitiveness.

Great expectations are attached in particular to the use of artificial intelligence (AI), which we address in two articles: firstly, in the due diligence of M&A transactions in the real estate sector and secondly, in property management. How can AI make the processes more efficient in each case and what are the prerequisites for this? You will find answers in the two articles. 

In addition, you can read in the Real Estate Bulletin how real estate valuations and their order management can be carried out time- and cost-efficiently with digital solutions and how the tax department should position itself in order to meet the demands placed on it when involved in real estate transactions. And you will learn why now is a good time to think about setting up your own real estate capital management company (KVG) and optimising existing KVGs. 

These are just some of the exciting topics in Real Estate Bulletin 07/2023. Download the issue here now.