The future of the German real estate market - Prof. Dr Hans Sommer at CIMMIT 2008

The IIR's kick-off congress for the year - CIMMIT - will be held at the Frankfurt Hilton Hotel on January 30 and 31. Prof. Dr. Hans Sommer, Chairman of the Supervisory Board of Drees & Sommer AG - will give a keynote address on the role of efficiency and sustainability in the construction of new buildings and development of existing buildings, and will then moderate the subsequent discussion.

Frankfurt / Stuttgart "Costs - Has the construction industry gone crazy?" This is the question that Prof. Dr. Hans Sommer will focus on during his keynote presentation at CIMMIT 2008. The constant increase in prices - primarily the result of the constant increase in the price of steel - reached between 4 and 12 % last year, with an annual average of some 7 %. Prime contractor tenders to project developers and investors, on the other hand, have risen up to 20 % over the prices of recent years - which were often insufficient to cover costs. This has happened mainly because subcontractors were no longer prepared to participate in such tenders. The development is currently having a massive effect on property developers and project underwriters, as the gap between the tight budgets dictated by low rentals and current market prices continues to widen. As a result, optimization of costs and building in the most efficient and sustainable way possible are essential elements of profitable projects. This requires developers and investors to gain early access to building industry knowledge, ensuring that it is taken into account during planning. Prof. Dr. Hans Sommer sees the KAIZEN-based process optimization system developed by Toyota as an essential approach. As a Lean Management method, KAIZEN helps to prevent defects and waste, improve quality, and optimize the overall construction process. According to Sommer, savings of up to 20 % can be achieved in this way - freeing up these resources for investors and the building industry. In order to achieve favorable tenders at reasonable prices through efficient construction, Drees & Sommer offers Lean Management using the frequently practiced Partner Model (sub-trade contracting with overall guarantee). Professor Sommer's address will be followed by a panel discussion in which Ulrich Bollwerk, Managing Director of Vivico Real Estate GmbH, Volker Herrmann, Director of HVM-IA at Fraport AG and Dr. Matthias Jacob, Chairman of the Management Board at Bilfinger Berger AG will look at the growth of construction costs and the consequences for project developers and project underwriters. Alternatives in the construction marketplace will also be discussed during this CIMMIT session.

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