Geared to the future

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Big Data, Virtual Reality, Artificial Intelligence, the Internet of Things, Building Information Modelling (BIM) – how innovative are housing companies when it comes to technology like this? What are the trends and challenges facing Europe, and how good are companies at positioning themselves with new products and services for tenants? In a pan-European study, Aareon obtained some interesting answers to just such questions.

Conducting a virtual inspection of an apartment or booking a housekeeping service via a tenant app – things like this could be a matter of course in the future; this is because “the property industry has recognised that it needs to embrace digitalisation; most housing companies agree on that.” This is just one of the findings that Arash Houshmand, Managing Director of Ampolon Ventures at Aareon, gleaned from a survey conducted among landlords. Although property companies are generally considered less progressive in terms of innovation and more focused on core business, the study showed that they were actually highly interested in innovative products and services. In autumn 2018, Aareon surveyed customers from the property sector in Germany, France, the United Kingdom, Sweden and the Netherlands on their attitudes to innovation.

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Diffusion research

In the study, the housing companies were asked to rate themselves in terms of their interest in and acceptance of digital technology (innovation) in the property sector, based on what is known as the diffusion curve. The curve showed that the surveyed participants were spread almost equally (normal “Gaussian” distribution) among the different groups, i.e. innovators, early adopters, early majority, late majority, laggards. Note: Around 3% of those surveyed did not provide a self-assessment and so are not included on the curve.

“It was interesting to note that the key factor motivating the housing companies to provide services via portals and apps was, apparently, to improve customer i.e. tenant satisfaction. They are clearly wanting to gain an edge on the competition by positioning themselves as particularly innovative companies. This is a new trend because up to now, cost cutting and process efficiency have always been the key motivating factors,” said Dr Imad Abdallah, Head of Group Strategy at Aareon.

Which technology and for what purpose?
Building Information Modelling (BIM) gained the most traction among the housing companies surveyed, around half of which stated that they intended to deploy this instrument in the next five years or so, mainly for the purpose of cost estimation/control. With regard to big data analytics, around 30 percent of the companies could see themselves using this technology, for example to identify rent arrears or provide a tenant-matching service. Of interest to landlords were networked sensors for use in predictive maintenance, smart metering and building security, while artificial intelligence could be of assistance when processing repair queries or providing other tenant services.

Challenges in the housing sector

Challenges in the housing sectorThose surveyed see the greatest challenges facing the housing sector over the next 10 years as coming from the following areas: demographics, financial systems, regulations, energy, technology and the environment.

More service for tenants
A quarter of the companies surveyed were already offering services to deal with minor repairs. Many were already planning to introduce more services for tenants, including digital options via apps and portals. “The focus here is on minor repairs, building security, providing essential services and services for special target groups – for instance, outpatient care, meals on wheels, and housekeeping services for senior citizens. These areas really do harbour great potential for Aareon,” emphasised Houshmand.

  More on Aareon’s tenant study in the article entitled “Looking app” in the 2017 annual report.

Many innovations in the pipeline
In principle, Aareon conducts research and development work in many different areas, this being a central pillar of its corporate strategy. Virtual assistant solutions that combine artificial intelligence with chatbots are almost ready for implementation and could be integrated in Aareon’s digital solutions for the benefit of the customer. “These processes will not only be supported by Amazon’s Alexa, but will also work with Google Home, too. Our customers will also be able to interact with tenants using bots via commonly used messag­ing services such as WhatsApp, Skype, and Facebook Messenger,” explains Dr Abdallah. Aareon is currently conducting research into the use of drones in the area of building security and property maintenance. In the future, Aareon will be focussing its research efforts on issues such as Big Data and the Internet of Things, as well as pushing ahead with the Building Information Modelling concept, as this is where the greatest benefit for the customer is to be found.

  Read about how Aareon is collaborating with certain proptech companies (the start-ups in the property sector) in the article headed “Innovation!“.

Who’s paying?
Then, there’s the small matter of cost. The companies in the survey could not agree on their estimation of tenants’ willingness to pay for additional services booked via digital applications. According to Houshmand, this is not surprising in view of the dearth of sample applications currently available to test this postulate. “The relevance of paid services to tenants seems to correlate with the disposable income of the household. And, of course, this willingness is greatly influenced by the design of the individual product and the added value it generates for the tenant.”

Looking to the future
Besides the cost factor, another interesting question concerns the challenges facing the sector in the future. Housing companies consider demographic, financial, and energy-related matters to be the key issues, although variances do exist from country to country. From the German point of view, demographic trends were rated most critical, while French companies considered financial and energy-related issues to be more urgent. The Dutch companies in the survey saw the environment as the biggest challenge.

Whatever the future brings, Aareon will certainly maintain its great commitment to research and development, with substantial investment in new trends and technologies. So staying proactive and forward-looking is still the name of the game. Aareon’s culture of innovation also entails getting pilot customers on board as soon as possible in order to harness their practical expertise and better incorporate national peculiarities and influencing factors. And it goes without saying that Aareon always shares the results of its research with customers so as to promote a close and trusting spirit of collaboration. Both sides stand to benefit from this approach.

Dr Imad Abdallah is a Member of the International Board. As Head of Strategy, he is responsible among other things for product strategy, international business development, strategic initiatives and acquisitions within the Aareon Group.
Photo: Aareon AG, Mainz, Germany
Arash Houshmand has been in charge of Ampolon Ventures since 2018. Ampolon Ventures is the venture capital arm of Aareon Group. Its goal is to create ventures and partner ambitious founders in order to build new, independent companies offering products and services that can improve the working and living experiences for millions in Europe and beyond. Ampolon Ventures partners and invests in start-ups and helps to scale new business models.
Photo: Aareon AG, Mainz, Germany


with Marcus Wilkin,
project manager at forsa

Mr Wilkin, you were in charge of the survey on behalf of forsa. What were the key aspects of the review?
The questionnaire is the key instrument of data collection in market research. It has to be tailored specifically to the object being examined and kept as straightforward as possible for all participants. Especially in a market as highly specialised as Aareon’s, it’s important to use technical terms in a way that ensures that they aren’t inter­preted differently by the individual parties.

How did you achieve that?
The questionnaire was prepared in English so that we had a standard basis for the international project team and the national markets involved. But in the international context, we also made sure that the participants had a common understanding of what exactly was being asked. For this reason, we had expert translators localise the questi­onnaire and made sure that certain questions and terms were ex­plained and clarified using examples.

About forsa

forsa is one of Germany’s few remaining independent market research and opinion polling companies, with offices in Berlin, Frankfurt/Main, Dortmund and Hamburg. As a full-service institute, forsa provides companies, political and governmental institutions, the media, and the world of science with precise facts – mainly for the German, but also for the European and international markets.

This is why housing companies want to provide their tenants with services via an app or portal:

“This corresponds with the zeitgeist and is necessary if you want to be a more attractive landlord.”

Housing company in Sweden

“To be able to offer a better service. Maybe that's the service, which is expected of us in the future. Maybe in the future, we can earn some money here.”

Housing company in Sweden

“We are looking at ways in which we need to adapt to meet our customers’ needs going forward. These are areas that we feel would make us more effective to them.”

Housing company in the UK

This is why housing companies want to provide their tenants with extra paid services via an app or portal:

“The services themselves and operating an app/ portal also cost money.”

Housing company in France

“If this means a high added value for the tenant, I could imagine situations where they would pay for it.”

Housing company in the Netherlands

This is why housing companies want to provide their tenants with extra services free of charge via an app or portal:

“We find affordable housing to be very important. We are reluctant to use services which increase the price.”

Housing company in the Netherlands

“Our tenants don't have a lot of money. Before we offer them such things, we must first meet their basic needs, i.e. provide a decent apartment.”

Housing company in France