Decision making more important than ever in the real estate industry
The conditions for real estate companies have been favorable since the financial crisis of 2008. Somewhat simplified, you can say that real estate companies have not had to be so focused on risks and that most external factors have been favorable.
But then suddenly, in the last 3 years more has changed than perhaps in the 30 years before that. This would be a challenge in all contexts, but not least in an industry where stability and long-termism are a hallmark. Now the real estate industry is facing several challenges – not least concerning borrowing and costs for capital, security protection, sustainability reporting and energy saving.
All in all, this means that order and order, financial and operational management (cost control, to be honest), as well as all factors that affect this have a very high priority. Due to the long-term nature of real estate, many decisions have long-term consequences. Then it is especially important that the decisions have a high degree of accuracy.
The current situation is therefore that real estate companies need to be able to make decisions faster, based on more sources of information, and in addition, the importance of make the right decision more important than in a very long time.
This requires a few things:
- Collaboration - when the importance of knowledge is greater and the need for information is broader, more competences, within and outside of one's own business, must collaborate in an effective way. The word collaboration is deceptively simple to understand and to realize the meaning of, but it can be complicated to achieve.
- Information management – when the range of information is broadened and the need to be able to use it from different perspectives increases, completely new demands are placed on the business's information model and management. Many real estate companies are stuck with a technical and structural debt in this matter.
- From data to value – There is no shortage of information. The problem is capturing the right information, structuring it and making it available for the right purposes. The transformation from data to value includes both structure and persistence, as well as creativity and entrepreneurship.
- Decision model – A decision model needs to be comprehensive, comprehensible, flexible and balance quantitative and qualitative aspects, analysis with responsiveness.
Ekan Management has 40 years of experience in the property industry. We supported real estate companies both through the real estate crisis in the 90s and the financial crisis in 2008. During the good years in between and after, we have worked with everything from energy efficiency, security issues, digitization, rental models and management processes, to mergers, development processes and sales, etc. Welcome to contact us with your thoughts and challenges in the property industry.