German property industry has some catching up to do when it comes to innovation

• Property companies want to be more successful, efficient and competitive with innovations
• Conservative corporate culture and lack of human resources stand in the way for respondents
• Greatest potential in the areas of sustainability, digitalisation and construction 

For a long time, the German property industry experienced a boom, but with increasing regulation and rising cost and efficiency pressure, the pressure on companies to innovate is increasing. The majority of companies have recognised the need for more innovation, but there is still some catching up to do when it comes to implementation. This is the conclusion of the ‘Road to Disruption’ study, for which KPMG in Germany and blackprintpartners surveyed over 200 managers from the property industry on the topic of innovation.

The topic of innovation is anchored in the corporate strategy of 72 per cent of companies, and managers promote innovation in three quarters of companies (75 per cent). There is a consensus that investment in innovation is crucial for long-term success (92 per cent). This is the only way for companies to remain competitive (88 per cent), grow (85 per cent) and open up new business areas (64 per cent).

However, there is a discrepancy between ambition and reality: a conservative corporate culture is the biggest obstacle to successful innovation processes for 51 per cent. 34 percent recognise hurdles in their own organisational structure, for example complex decision-making processes in the planning and implementation of innovations. In 27 per cent of companies, there is a lack of knowledge and experience in the application of innovation methods. Half of the companies (50 per cent) lack human resources and almost one in five (22 per cent) lack a corresponding budget.  

Sarah Schlesinger, Managing Partner of blackprintpartners, says: ‘Innovation is the key to sustainable business success. The industry has no knowledge problem, no technology problem and largely no resource problem. A weak economy and pressure from digitalisation and ESG provide optimal conditions to further promote the will to innovate. In order to develop this innovative strength, a change in mindset, significantly more strategic and methodological expertise, adapted organisational and decision-making structures and implementation skills are also required. This is how the construction and property sector can be successfully geared towards economic, ecological and social sustainability.’

In order to increase their innovative capacity, 34 per cent of companies cooperate with start-ups, 29 per cent rely on collaboration with external research and development institutions and almost one in five companies intends to enter into a joint venture in the next five years. 31 per cent rely on their own resources and have set up an internal innovation department. Thematically, companies see the greatest innovation potential in the topics of ‘sustainability’ and ‘digitalisation’, which are mentioned most frequently at 19 percent and 17 percent respectively. ‘New construction/renovation’ (16%), ‘data management’ (12%) and ‘process optimisation’ (11%) were also identified by the participants as innovation fields with high potential.

The results of the study will be presented on 6 June 2024 at 12.35 pm at the Pink Future Stage of the ‘Real Estate Arena’ trade fair. Interested parties can pre-order the study here. 

Clemens Reisbeck

Deputy Head Corporate Communications
KPMG AG Wirtschaftsprüfungsgesellschaft

T +49 89 9282 1722
creisbeck@kpmg.com