After studying International Management and completing an internship at Engel & Völkers, he climbed the career ladder and now heads all business activities of the global real estate service provider in Germany, Austria and Switzerland. We asked him about the challenges he faces in his work and how major economic trends and events are changing the real estate industry.
Till-Fabian, how has the Corona pandemic affected the real estate industry?
Fully: As in other industries, the Corona pandemic first of all significantly slowed down day-to-day business in Germany and abroad. In the real estate brokerage sector, for example, common processes such as property inspections or public administration appointments could no longer take place at all - or only to a very limited extent. In addition, delays along the entire value chain have continued to occur to this day due to worldwide health outages. In addition, the Corona pandemic has changed the basic understanding of work and leisure. Today, some typical office work takes place entirely in the home office. This naturally poses major challenges for the entire industry because it could result in different building requirements in the medium term. Moreover, it can also be observed as a result of the pandemic that, in addition to the generally known temporal delimitation of work, the spatial one is also increasing. Consequently, the desire for more living space with an additional room for working from home or retreats such as a garden, terrace or balcony has become greater. The return from the city to the countryside also plays an important role here, which has been reflected very positively in our area regions.
What challenges is the real estate industry facing currently?
Detached from the aforementioned challenges of the Corona pandemic, the industry is facing economic changes at the moment. On the one hand, we continue to observe high demand for real estate. Supply is limited, especially in inner-city locations. Real estate as an investment continues to be in demand due to the global uncertainties on the financial markets. It remains to be seen how this will change in the wake of the European Central Bank's latest key interest rate adjustment. Further challenges are currently posed by the further increase in construction costs and by the increased scarcity of resources, which is once again being spurred on by the Russia-Ukraine crisis. Increased interest rates and rising construction costs will delay the planning and completion of new construction projects.
As can be observed in other industries, the real estate sector is undergoing a transformation due to digitalization. What is required today on the part of all market participants are open structures and holistically networked services that adapt flexibly to the changing needs of customers at all times. Knowing "today" what our customers will need "tomorrow" will increasingly be the key to success.
You have already addressed a major topic that is currently posing a particular challenge to the economy: Digitization. How do you think this will change the real estate industry in the coming years?
Digitization is already making enormous inroads into the real estate industry. This is also imperative because our world is undergoing profound and increasingly rapid change. Digitization is becoming particularly transparent in the area of real estate brokerage. Whether new construction projects before completion or existing properties - today's customer expects at least realistic visualizations and virtual tours at any time of day. "Virtual reality" is the keyword. In addition, the real estate industry holds enormous potential for automation. Here, the focus will generally be on management. Be it the management of one's own property or finances. In the future, it will be possible to organize all real estate services centrally and automatically via various platforms. The main challenge is to make this intuitive and as location-independent as possible.
Another challenging topic for companies is how to deal with sustainability issues. What is the impact of sustainability in the real estate industry?
The topic of sustainability is essential for the real estate industry because it´s one of the economic sectors with the highest greenhouse gas emissions. The public, investors and politicians are demanding comprehensive adjustments to the business models and products of the real estate industry. This is because the sector must reduce its CO-2 emissions by around 80 percent compared with the 1980s.
As in the automotive industry or the textile industry, uncompromising consideration of ESG criteria must be pursued along the entire value chain. "Circular Economy" - i.e. the energy-reduced production of durable building materials from recycled scrap material - will play a particularly important role, as will the topic of "Sustainable Finance". Companies are therefore advised to position themselves strategically at an early stage with regard to environmental aspects, their own ecological footprint and, in particular, social commitment, in order to remain competitive in the future.
Thank you for your time and insights.