PropTech Connect webinar - 2025.02.19.
On Wednesday 19th February, Valeria Bini, Director, Head of Asset Operations at PATRIZIA SE, Andrew McLennan, PhD, CTO, MD & Global Head of Tech, Private Alternatives & Real Assets at Nuveen, a TIAA company, Andreas Kozma, Founder & CEO at iREMS International AG, joined us to discuss the strategies to enhance employee experience and to turn commercial around.
It was a pleasure hosting our fantastic speakers and the highly engaged audience in this session! In case you missed it, here are some key quotes from this week's webinar.
The session recording can be accessed through the link here:
Webinar Highlights
1) Current Outlook - How would you describe the current state of CapEx planning in real estate, particularly in safeguarding asset value and ensuring liquidity for both short-term and long-term objectives?
Valeria: "A key question to start with is actually the definition of CapEx. There is the accounting definition, which considers the value spent on increasing the value of the asset. This is present in the PNL, but it is not in the balance sheet. In Patrizia, we define CapEx as expenditure above a certain amount, as there is a dedicated specific process in our system and invoice validation process to be followed.
(...) There are many aspects to CapEx planning, and all need to be considered, especially because volatility in the financial market is high. CapEx needs to have a clear goal - do we want to develop to refurbish and let, or do we want to refurbish to sell?"
Andrew: "Nuveen is the 5th largest real estate owner globally. We have assets in almost every country in the world and across every sector, so we have more than one asset class per geography. With such a complex portfolio of global assets, the data that we collect and use is critical to drive insights across the broad portfolio. There's a famous old saying that without data you're just another person with an opinion. If you don’t have data to back up and inform your CapEx decisions, you can just have cost without any return on investment.
We employ third-party portfolio managers who have expertise in specific geographies and asset classes. They each have their tooling systems and ways of operating, so we need internal teams who can review data and collect it consistently so that we have a world-leading data solution that enables us to have data at our fingertips to make informed decisions about CapEx."
Andreas: "With increased complexity originating from a less forgiving business environment and also increased regulations, especially around ESG, the margin of error is shrinking. Asset managers need to have data that enables them to make informed decisions, and also to increase transparency in a way that supports communication and learning from past data. We see in our clients that this is a best practice for asset managers of all sizes. (...) You need data to prove ROI, and without that certainty asset owners tend to stay on the conservative side and miss out on fantastic opportunities."
2) Challenge in CapEx Planning: What do you see as the biggest challenges real estate organisations face in aligning their strategies with CapEx planning?
Andreas: "ESG is often seen simply as something to report on, so gathering data to fill reports becomes the priority. This is of course important however, if you have sustainability data, you can make better investment decisions that increase the value of your assets. The main challenge is now this transition where sustainability data works as the new financial data - it will be included in reports as its structure will be linked back to financial KPIs. As discussed with Valeria and Andrew earlier this week, it is now crucial to classify, handle, and communicate this information, to then be able to act on it."
Valeria: "Data is the biggest challenge. We need to invest in having the right technology and process to follow and monitor CapEx, especially as we work with external providers and we need to be able to support and ensure that the right data is being delivered at the right time. This is crucial to be able to detect anomalies in leading indicators before they become a problem. (...) Another key challenge is that we are investing in a challenging scenario. The predictions made before the start of the development might not hold true after 6 months, and you might end up with an empty asset. It is critical that there is enough valuable data to ensure that you are making good investment decisions."
Andrew: "When selecting assets for a sustainable fund, there is the possibility of directly acquiring assets that already perform well on sustainability metrics. These usually come at a premium, as their occupancy rates are high and therefore valuations are high. However, many of the assets that you may own or be looking to acquire may not yet be at that standard, so you need to spend to bring it up to that level. Data would enable you to identify whether the CapEx required would result in an appropriate valuation and occupancy. If that is not the case, then you would need to look at selling early on. For the assets where you can justify CapEx, then you need data to determine how much, in which form, and in which order? This is not necessarily a question of more data. The challenge is to collect the data that gives you the right signals and information to make the right decisions."
3) Data in Real Estate: How are real-time data integration and innovative tools enabling more informed CapEx decisions, and what insights can they provide to avoid liquidity traps and maintain stronger financial outcomes?
Andrew: "I will talk about two components: AI and alternative ways to use data to drive alpha.
We often see that people don’t get the results they expect from AI because they are not asking the right questions, not using it for the right business case, or, most often, they are not providing the right data. This is not a simple challenge in the context of real estate. When you're thinking about data science, analytics, machine learning and AI, if you had a consolidated central data house with governed data that people could trust, a single source of truth, then it would be easy. But that in real estate is often on Excel files scattered across the ecosystem, so many organisations now are doubling down on the collection and storing governance of data. We are one of these organisations. Once this is done, you can then do analytics on top of it.
On my second point, you often see data and technology being treated as a back office function and a cost centre. I totally disagree with this. Although each investment and quote is unique, when you step back and leverage data, you can actually see similarities between buildings and you can use data science in an innovative way to drive alpha, not just using data as an operational efficiency solution."
Andreas: "Tools that help you collect and analyse data points to then help you prioritise CapEx projects can only work if you have the right data. As you both mentioned, there are considerations and differences in data collected from different asset classes and countries, as well as nuances related to culture, strategy, people processes, and technologies already in place. The challenge is to take all the information contained in data, and to assemble this uniform data model that you can feed into these tools. Similarly to Nuveen, many of the landlords that we work with use a wide range of property managers, and a data point like “rental income per X” for example, can mean two very different things for two managers. These data challenges need to be tackled by funds of all sizes with the support of great tech solutions before AI can be layered on top for analysis and recommendations."
Valeria: "We need greater clarity on the requirements of different stakeholders, find the interconnections between different departments and the level of granularity needed at different levels. (...) Coming back to what Andrew said, it is not about having all the data - you need to have the right data. We need to put a pyramid strategy in place, with different levels of control for providers, asset managers, and then going to fund management. At Patrizia, we think about data requirements, data ingestion, and finally data governance to ensure clarity and that data is actionable."
4) Action Points: What immediate steps should real estate professionals consider to optimize CapEx planning across retail, office, and hospitality, and how can they sidestep the common pitfalls that undermine asset value or delay transactions? What impacts/initiatives can have an immediate impact?
See the full webinar in the link here:
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