This article is originally written in German for Haufe.de, by the COO of BuildingMinds, Jens Müller.

The real estate industry can be structured into a variety of dimensions. The geographical perspective lies at its heart, as every property has its own fixed plot of land. This allows conclusions to be drawn about the micro and macro location, from which various demographic or price developments can be derived. A further dimension would be the division of labor: here the different areas of the life cycle of the property are distinguished; for example, project development from asset management, property management from facility management and so on. For most readers, all this may be trivial. So why this introduction? That which is so self-evident in real estate economics that it hardly needs mentioning is still almost completely missing from the digital world.

In the digital sphere we lack the connection

The consequence? Without a comparable system of coordination in the digital sphere, there is no orientation. Various players are committed to working on partial solutions meant to increase the efficiency of processes. So far, however, there has been no congruence: the individual solutions do not fit together. In order to create a network of applications, either a disproportionately high additional effort is required or the much criticized “island solutions” and “media disruptions” threaten. Many companies are inclined to buy competence in the form of software solutions and digitalize only specific steps within their value chain. In the most recent digitization study conducted by ZIA and EY Real Estate, 31 percent of real estate companies surveyed stated that they were relying on start-ups to implement their digitization strategy. This commitment is laudable. Without an underlying orientation framework, however, there is a danger that in short order one can’t see the wood for the trees – or that a comprehensive digitization is stalled by a myriad island solutions.

Guiding star for the digital real estate industry

At the same time a suitable orientation framework perhaps pre-dates the recent push towards digitalization in the real estate industry. It originates from planning, the much-discussed but as yet too little-used Building Information Modeling. The so-called Digital Twin has the potential to become a guiding star in the digital realm of the real estate industry. As in the dimensions of geography and division of labour, the focus is on the building itself. What’s more, a digital twin building is a digital application formed around a replica of a familiar object. An intuitively comprehensible digital infrastructure, understood by a CEO sitting in front of the PC in his office just as well as a facility manager on site with his tablet, without either having to study computer science.

Home for data

The digital twin offers a home for all data relevant to real estate: From planning to contract to real-time data on the condition of the building or its technical infrastructure – it can all flow into a central location and be used for an almost infinite number of fields of application. Each individual solution can be oriented to the central element – the digital twin. Data silos are thus avoided from the outset. This is an important argument in times when more and more decisions are made on the basis of data. 56 percent of respondents to the above-mentioned study agreed with the statement that they use data analysis to make or support corporate decisions. In addition to interacting between individual solutions, the data must also be compatible and transferable. In this context the standardization of data in the real estate industry, initiated by GIF, the Gesellschaft für Immobilienwirtschaftliche Forschung, is a very welcome development.

On the shoulders of giants

Again and again one also hears and reads the almost unanimous opinion that the real estate economy lags behind with digitization. At first glance, this self-awareness may seem stark, but the situation also offers us an advantage. We can use the experience of other industries without having to repeat their mistakes. We can design the process with more foresight and a greater wealth of experience than many industries before us. The well-known analogy of “dwarves on the shoulders of giants” encapsulates this form of progress. It is now up to us all – established companies like PropTechs – not to let such positive preconditions fizzle out in an undirected way. We have the tools, and there is no lack of commitment in the industry. However, an orientation framework for the digitalization of the real estate industry is urgently needed. Without it, we will commit a lot of development to perhaps the best partial solutions, which either don’t end up in a digital real estate industry at all, or if they do then much the worse for wear. The digital twin is the logical anchor point of this yet-to-be-constructed orientation framework. And it is self explanatory – after all it is modeled on the building, with all its facets.

We need a framework for the digital real estate industry so that we don’t lose ourselves in individual solutions. With the digital twin, we have a fixed point in this system of coordinates.
Jens Müller, COO of BuildingMinds