Cloudbrixx survey: Excel continues to dominate cost controlling in property management

The current economic situation and regulatory requirements are forcing the majority of industry players to make adjustments in property management. In addition to sustainability measures, these include in particular cost-cutting measures and lease negotiations. In terms of cost controlling, the quality of the data poses the greatest challenge for the sector. Half of the property companies already use their own tool for cost management, but in practice the data for cost and financial reporting is still largely collected and processed using Excel. The property sector is therefore still a long way from being able to generate reports at the touch of a button. These are the key findings of the "Cost management in property management" survey, which Cloudbrixx conducted together with RUECKERCONSULT from December 2023 to January 2024.

Cloudbrixx presented the survey results in an industry webinar last week and discussed them together with Carolin Brandt, Deputy Head of Asset Management at HIH Real Estate, and Marcel Steffens, Branch Manager Nuremberg at TATTERSALL LORENZ.

Property management in transition.

Marcel Steffens, Branch Manager Nuremberg at TATTERSALL LORENZ, confirms the results of the survey from his practical experience, according to which 87 per cent of respondents see a direct impact on the management and administration of properties due to the economic situation and regulatory changes: "The issue of profitability has clearly moved into focus in the last twelve to 18 months. Property managers are close to the property and, more than ever, have to provide sound, concrete arguments for planned projects - including in terms of costs."
Carolin Brandt, Deputy Head of Asset Management at HIH Real Estate, says: "The sustainability requirements are generally increasing the demands in terms of reporting and also due to the increased yield requirements for cost controlling. Asset managers now want to evaluate issues differently and know what a property can do, what it costs and where savings can be made and with what changes. This increases the demands on property managers." Steffens adds: "Our investors want to be picked up faster and better. This also affects the issue of liquidity - planned cash outflows must be adhered to. As property managers, we have to support asset management and investors with this challenge."

When asked about the specific effects of the economic situation and changes in regulation on property management and administration, 53 per cent of respondents cited the implementation of sustainability measures and cost-cutting measures. 37 per cent of survey participants are entering into lease negotiations. In addition, a third of survey participants also cited the adaptation of space concepts as a resulting measure. In addition, the respondents also identified the need for more detailed reporting (30 per cent), adjustments to building technology and greater control of consumption (both 26 per cent) as a result of the changed environment for property management and administration. Seven per cent are also considering a different tenant selection.

Data quality as the biggest challenge in cost controlling.

"What is surprising is that only two per cent of those surveyed cited the implementation of a software system for data collection as a direct effect of the increased influencing factors in property management and administration, yet when asked about the biggest challenge in cost controlling, data quality was cited by 85 per cent, ahead of the completeness of the income and expenditure side and communication with service providers, tenants and contact persons (both 48 per cent)," says Marc Mockwitz, Managing Partner of Cloudbrixx.

Steffens emphasises the need for efficient data collection and analysis: "It is important to us that we are able to make important decisions for the development and strategy of the portfolio based on solid data. For this reason, we began digitising and automating our processes several years ago." Brandt adds: "With our digitalisation landscape, we are not only able to manage data, but also create detailed evaluations and benchmarking as a basis for decision-making for our asset managers so that we can act more quickly at crucial points."

Still a long way to reporting at the touch of a button.

Although the industry is no longer right at the beginning when it comes to the automation of reporting, there is still a long way to go before reporting is available at the touch of a button. None of the respondents rated the status quo as fully automated or close to it. The average score is 4.7 on a scale of one to ten, with ten being fully automated. "A key factor influencing the automation of processes is the development of a digital ecosystem in companies," says Mockwitz. "Every company has its own individual software landscape and environment, and simply setting up or expanding a digital ecosystem via plug & play is far from standard. There is no alternative to the use of interfaces if data is to be extracted from the individual specialised systems. In many areas, we still see great untapped potential for efficient data utilisation."

The survey also revealed that the majority of participants (74 per cent) are affected by rising management costs of between ten and 15 per cent. 20 per cent of respondents even stated a cost increase of 20 per cent or more. 46 participants from the entire industry spectrum took part in the "Cost management in property management" survey, including asset managers, project developers, investment managers, property and facility managers, institutional investors and financiers.

Photos: Carolin Brandt - HIH Real Estate, Marcel Steffens - TATTERSALL LORENZ and Marc Mockwitz - Cloudbrixx