The Digital Real Estate Survey 2023 shows that the digitalisation maturity of real estate companies in Germany and Switzerland is moderately increasing. The index measures the extent to which market participants are addressing digitalisation and how far they have already taken and implemented measures. The Digital Real Estate Index across the entire market is 4.7, an increase of 0.2 points compared to the previous year. While the Swiss index rose slightly, the German index fell by 0.1 points to 4.8.
The assessment of digital technologies has been stagnating for years and is thus developing only slowly. Although all technologies are being used more frequently, the increase and expectations of benefits are rather moderate. With the exception of “Decentralised Energy Technologies”, which have experienced a boost due to the looming energy shortage.
Expensiveness inhibits digital investments
The development of digital maturity of the different roles in the industry also continues to be even. FM service providers have a higher level of maturity in terms of digital transformation than other market participants, but rising inflation is apparently putting them under such pressure that investments have had to be drastically reduced. Planners and contractors, on the other hand, are investing more in innovation and digitalisation, especially due to the increased use of BIM in project planning. Two thirds of the companies spend more than 1 percent of their annual turnover on innovation and digitalisation, with small companies with up to 49 employees investing proportionately more than medium-sized and large companies. Large companies with 250 or more employees have a higher digital maturity than SMEs.
“If you compare the investments as a percentage of annual turnover across all company sizes with the turnover of the construction and real estate industry in the narrower sense, this results in a considerable sum in the billions which is spent in the industry on innovation and digitalisation,” explains Rebekka Ruppel, CEO of pom+Germany. “It makes you wonder why the digital maturity level is not increasing faster.”
Immature data skills as the biggest challenge
One possible explanation is low data maturity combined with low data literacy. The survey shows that data analytics is used by only a quarter of respondents and that most are engaged in pilot projects or knowledge building (38% of respondents). Only 4 percent are already using the technology in their day-to-day business. The results show that data analytics has a positive impact on more areas of a company than expected – especially in investment, portfolio and asset management. Improved reporting is seen as the biggest benefit, while the lack of quality of the database and the lack of know-how in handling data are seen as the biggest challenges.
“The awareness of data as an asset has not yet taken hold in the construction and real estate industry. At the same time, the requirements for data architectures are very complex in the extremely heterogeneous environment with highly fragmented processes and different participation groups. Clear and transparent communication in conjunction with structured data governance is necessary here to create a better understanding of data,” explains Rebekka Ruppel.
The maturity of digitisation in the industry depends not only on technical possibilities, but also on experience, competences and know-how. Companies should focus on expanding and maintaining partner networks as well as overarching business models in order to move from individual performance to joint development. The exchange of data across company and industry boundaries is expected to increase rapidly, so companies should raise awareness of data.
