Start-up companies have been working their way through the real estate industry for years now in an effort to get investors, owners and letters interested in their digital ideas. Their outreach in the market segment of tenant and neighbourhood apps is yielding increasingly positive results. But business models differ.
A look at the daily routine involved in parcel delivery shows the advantages offered by a neighbourhood app: countless carriers toil each and every day to deliver untold thousands of parcels and packages to recipients. The total for Germany alone was 3.2 billion shipments in 2016. That could rise to 5 billion by 2020. But is anyone ever home when the parcel carrier rings the doorbell? The addressee at the end of the last mile often cannot be reached, which gets on everyone’s nerves. A neighbourhood app has solved this thorny problem for residents of the LeFlair residential development in Düsseldorf. The owner Interboden uses a digital tenant portal to ensure that parcel deliveries function as smoothly as other amenities. If any of the 1,400 residents are away from home when the carrier arrives, the packet is accepted at a central service point in the development and the recipient is informed through the digital residents’ portal. This saves time for the parcel service provider and spares the nerves of residents.
The LeFlair app was developed and implemented by Animus, a start-up founded in Ratingen in 2015. “Strategic partnerships such as those for sending parcels, getting laundry and dry cleaning done, having food delivered, or arranging for cleaning services are an essential part of our digital system,” says Animus founder and managing director Chris Richter. As a white label solution, the Animus software offers other functions for both real estate management and networking in the neighbourhood, and recently also for smart home technology. The app has four modules that are intended to offer a universal hub among all players and for all uses related to a property.
“We want to make living and working in buildings more convenient,” says Richter. By offering an app as the digital soul of a neighbourhood, Animus (which means “soul,” among other things, in Latin) is addressing residents and users of residential and commercial buildings, as well as project developers, builders, owners and managers, which it hopes to gain as customers. Richter is convinced that his app offers added value not only as a result of greater customer satisfaction, but also primarily due to cost savings and optimised internal processes. According to Animus, economies of scale in property management can be seen above about 50 units.
Efficiency potential for the real estate industry
The Deloitte consulting firm did a study for the housing industry in 2017 to determine how much time the digital exchange of leases, documents, cost statements and damage reports via an app can really save. Deloitte was supported by the Swiss start‑up Allthings, created by Stefan Zanetti in Basel as a spin-off of ETH Zurich in 2013. Allthings has been recognised as a digital pioneer and now provides support for real estate clients such as Credit Suisse Asset Management AG and Losinger Marazzi AG. The company developed a modular tenant app that connects micro-apps to integrate diverse functions and applications such as those offered by third-party providers.
The study focused in greater detail on the subjects communicated in the tenant app’s “service centre” function, primarily damage reports, based on an evaluation of Allthings. Deloitte did the following calculation: handling a case of damage takes about 150 minutes when not using what is known as a “trades interface” (web-based repair service) and only about 90 minutes with a trades interface. If the tenant uses an app with a structured menu to report damage, if photos are also sent in using the app, and if this is followed by an automated in‑house process for categorising the damage, arranging online for a repair, coordination of scheduling and acceptance of the repair, the process will take about 30 minutes on average. Building managers and portfolio owners should sit up and take notice, particularly when mass processing involving a large percentage of simple, repetitive tasks must be optimised.
Looking closely at what users want
Another important conclusion of the Deloitte study is that as more tenants register and particularly as they use their tenant app more frequently, it will be easier to achieve the desired gains in efficiency. Communication functions such as a digital bulletin board initially have no direct effect on the letter's functions, according to the study, but they are very important for the acceptance and use of a tenant app. The hoped-for improvement in performance therefore also depends on what users want.
In another study, tenants and owners were asked about their use of apps. Aareon, based in Mainz, is a leading consultant and systems house in the European real estate industry and worked with market researchers at m-result to develop the International Resident Survey. Matthias Reus, head of the market research department at m‑result, observes, “It is generally striking that such a broad base already feels the need for app-based products and services.” He adds that one of the most popular offerings is information about free-of-charge neighbourhood assistance, along with information about receiving parcels and fee-based services.
“The more the real estate industry knows about the local wishes and needs of its tenants and owners, the better they can tailor the development of new services and their placement on the market,” says Arash Houshmand, Programme Manager Plattform Wohnen at Aareon. The app that his company created for LEG Immobilien AG, which has been available to some 130,000 tenants since early February 2018, will be expanded to include additional services and tenant communication in a follow‑up project.
Business models differ
There is now a greater choice of app solutions and providers. For example, Promos, a specialist in software solutions for the real estate industry, offers the service app Easysquare, which Vonovia uses as an owner app. And BUWOG commissioned its tenant app from DIT Deutsche Immobilien IT & Marketing. But not all apps are alike, because business models differ, and it is far from clear which concept will prevail on the market. And of course the interface with existing corporate IT must function properly to be able to use automated processes to take full advantage of an app solution. The choice of a partner company is therefore likely to be decisive. And it’s not an easy choice to make.
The start-up casavi, for example, was established in 2015 to offer added value to many participants, as Animus does. The casavi business model is aimed at the development of communication and productivity platforms for digital property management. The emphasis was on tenants’ needs, but this also benefits housing companies, says Peter Schindlmeier, co-founder and managing director of casavi, explaining the basic idea. Co-founder and managing director Oliver Stamm also points to scalability: “Increased efficiency thanks to digital property management is the decisive aspect.”
One example of what casavi has to offer is the Schwabinger-Tor app with its administration, social, sharing, and local services functions. The idea of sharing takes centre stage at the new urban development in the Schwabing district of Munich. “Among other things, residents have access to car sharing using the Schwabinger-Tor app offered by the builder and owner Jost Hurler,” says Stamm. A survey of tenants showed that some 90 percent of respondents consider the app to be “essential,” he says. This is also reflected by the colourful array of ways the community uses the socialising function. But why is communication among neighbours so very important?
Due regard for social components
The more uprooted people are in how they live – for example, with fewer family members nearby – the more important neighbours become, observes Barbara Nothegger in her book “Sieben Stock Dorf” (Seven-storey village), citing the urban researcher Ruth Rohr-Zänker: “A good neighbourhood offers emotional support and security. This often occurs in the form of minor assistance with everyday life.” So it’s no surprise that social platforms like nebenan.de, created in 2015, are increasingly popular. The promotion of relationships in the neighbourhood addresses trends such as demographic change, increasing anonymity, individualisation, and sustainable use of resources. The principle of nebenan.de seems very simple: “Get acquainted, share, help, give, inform, come together.”
It wasn’t just casavi that looked intensively at portals such as WirNachbarn, FragNebenan.com, Nachbarschaft.net and Nextdoor from the United States. “The context is similar, but the approach is different,” observes Oliver Stamm. Companies such as Allthings, Animus and casavi derive their apps from a client, a building or a project development, while digital neighbourhood networks are dedicated to an open group of people.
The PropTech company cunio was primarily oriented to the network effect of open portals when developing its app: “Without the initiative of an owner, cunio housing communities form in a property,” says cunio partner and CEO Erik Boska. At the same time, letters can use a web-based application developed specifically for them to manage residential properties or they can connect their existing systems to the housing community’s app.
HomeBeat.Live has been showing how residents can actually become drivers of digitisation in the housing industry since 2017. The Berlin provider hopes that its open source platform will empower residents to digitally manage their building themselves. The start-up is confident: “Together we are democratising the digitisation of apartment buildings.”
Architects, urban and traffic planners and urban sociologists are also getting active and initiating new applications along with software developers. The most recent example is Quartiersapp, a company established in 2017. Andreas Richter, managing director and co-founder, explains the idea behind the business: “The Web-based neighbourhood app serves as a social area network. The basic content is generally socialising, e-mobility (reserving, booking, and paying for car sharing vehicles), new energies and the new economy.” The app is also open to third parties. The company is currently developing a neighbourhood app for the 145-hectare Franklin conversion area in Mannheim, where some 9,000 people will live. Residents will use it to gain access to the booking system for car sharing and e-bikes. The app will also be used to display neighbourhood-based energy consumption.
Digital gloss to enhance the image
“I am absolutely convinced,” says Chris Richter, “that the trend of an increasing number of comfort functions in the real estate sector cannot last. This is clearly also associated with an increased value of the assets.” And Oliver Stamm thinks that “a neighbourhood app is certainly an incentive for future tenants and a very good way of simply and quickly ensuring user satisfaction.” Commercial locations are also experimenting with digital solutions, hoping to use apps to make living and working in buildings more attractive, more networked, and more urban. For example, a property from the institutional fund Urban Campus Nr. 1 is being equipped with a service app by Allthings. The service app by Animus for the EMPORIO-Quartier in the Hamburg city centre is also about to be introduced. During a test phase, the more than 1,500 office employees in the building will use the app to access exclusive partner offers from the surrounding area, a digitised concierge service and an online marketplace. The owner Union Investment is also working with the ParkU service provider to test a park sharing concept. People who lease parking spaces can rent them for short periods to employees who work in the building, as well as outside visitors. And the Seestern business centre, a refurbishment project in Düsseldorf, also hopes that the Seestern app by Animus, launched in April, will help improve the image of the modernised building complex, originally built in 1961, which is now getting a contemporary digital gloss in the form of its own app.
By Elke Hildebrandt