Asset Management: Real-estate strategies from the Drees & Sommer network

A strategic approach to real-estate is becoming ever more important. Whether for investors or Owners, maintaining or adding value is decisive not only with regard to a possible sale. Drees & Sommer Asset Management offers a comprehensive service package that allows active control of properties and portfolios and ensures their future viability.

As the result of numerous very successful transactions, in the last five years the ownership structure has shifted toward institutional investors and capital-market investors. In addition to these "pure" investors, the owners of operationally necessary properties are also rethinking the situation. Here, Drees & Sommer offers Asset Management, a service that goes far beyond conventional property management. It also covers systematic investment and renovation - also with a view to possible sale. Drees & Sommer Asset Management can be divided into lease-related and building-related measures which mesh strongly. The individual services are:

. Due Diligence
. Portfolio check
. Life Cycle Cost consulting 
. Optimization of operational and additional costs
. Tenant management, tenant fitout
. Revitalization studies
. Project management for remodeling and renovations

In recent years, the asset managers have handled extensive projects in widely differing portfolios featuring active control, identification and implementation of individual measures and recommendations with regard to sale.

Example project: Jakobi Passage, Rostock
A change of tenant required restructuring of the lease areas and tenant fitout. This was coordinated and implemented by Drees & Sommer.
 
The restructuring provided an opportunity to optimize operational and additional costs. Drees & Sommer carried out a study that showed that the new structure of the leased space would save some 25 percent of costs, for example through reduction in the size of general areas. The experts then examined the Facility Management contracts with the result that the reduced costs could be cut by a further 10 percent through optimization of these contracts. Drees & Sommer was also involved in restructuring of the lease agreements in order to ensure that apportionable costs really were apportioned to tenants. 

The reduction of operational and additional costs and the optimization of contracts resulted in a cost benefit for the Owner without any disadvantage to the tenant. Although greater costs were apportioned to tenants, the overall operational and additional costs were reduced, so that tenants were not charged more, even though the Owner was able to cut costs.

Example project: Robert Vogel GmbH und Co. KG Hamburg
Property company Robert Vogel - which owns over 160,000 square meters in prime locations in Hamburg - wanted to examine the profitability of its portfolio and reconcile these with maintenance costs. The study was to examine where investment was worthwhile and where sale was opportune.
Using recognized methods, Drees & Sommer established the life cycle costs in order to more effectively harmonize measures necessary in the future and to avoid investment peaks.  In addition to sound budget planning, savings potential was also identified: With the aid of the life cycle costs, Drees & Sommer established the necessary data and information for a new invitation to tender for services. This led to a qualitative improvement in services and cost reductions of 15 to 20 percent.

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