Inflation, the interest rate turnaround, digitalization, a rapidly changing world of work – our times are full of challenges, but also of opportunities. For some years now, companies in other industries have been working with the term VUCA and the need for transformation. For the real estate industry, however, this term is not yet in common parlance, as it traditionally lags somewhat behind with transformations. The abbreviation VUCA comes from the English language. It stands for volatility, uncertainty, complexity and ambiguity and describes difficult framework conditions. Our industry is also exposed to these conditions, not least due to the coronavirus, rising construction and financing costs, and increasingly stringent ESG requirements. There is immense pressure to take action, to identify and leverage opportunities, also in turbulent times and, more importantly, to initiate a transformation process.

We have been using the VUCA model for more than a year in our company, as a means for managing our own transformation. Our aim is to deploy this analytical tool to find answers to the question of how we as a company want to set about actively shaping the future.

We define transformation as ongoing development to secure success. I like to use an image from the Chinese language in which abstract concepts are often composed of two words: The first character stands for danger, while the second symbolizes opportunity. This opportunity must be seized.

In these endeavors, anchoring the activities pursued by our employees as a result of the VUCA model as a process within the company is essential. We have already done this at Real I.S. as we all agree: the future will look quite different. We ask ourselves what will be in 2030 and what steps we are already taking today. VUCA gives us the analytical framework.

For us, VUCA is not a “fair weather” instrument, but a genuine transformation program. We break down the issues of the future to the level of our organization. With this in mind, we deliberately bring groups together to enable agility – and because the framework conditions have changed.

With a view to 2026, we have already established four initiatives – Act Digital, Working Next Level, Act Sustainable and Create Experience. Employees are largely responsible for these initiatives – because every transformation is also a mindset issue. Basically, people are not keen on uncertainty. This being so, it's important to take them along with us on the journey of transformation.

For many people, the image of a new age features prominently at present. Yet profound structural changes have been shaping life ever since agrarian societies continuously transitioned to industrial societies, starting with the first industrial revolution. Economic historians are meanwhile counting the fourth industrial revolution, initiated at the end of the last century by the beginnings of the intelligent networking of people and machines in work-related processes with the aid of information and communications technologies.

And this is where things get doubly exciting: Firstly because, with each industrial revolution, the pace of upheaval has accelerated. Hence my conviction: The uncertainty perceived by many people with some degree of skepticism concerning the impact of digitalization under the fourth industrial revolution will bring consequences for our working world in ever quicker succession. It is up to us to recognize and help shape these developments instead of holding back.

Secondly, the fourth industrial revolution currently under way is in the process of dividing the perception that now determines the mindset of each and every one of us through digitalization into two large geographical spheres: the West and China. Back in 2010, the U.S. linguistic research society American Dialect Society named "googling" as the word of the decade. Ten years down the line, however, Google no longer plays much of a role in China. Corporations, including Alibaba, Baidu and Tencent, determine the perception of around one-fifth of the world's population.

Seeing as all of our thinking is decisively shaped by access to information, we are heading for a world in which simultaneous perception of something will no longer be the same in the future. Developments with global consequences (e.g., the COVID-19 pandemic, the Ukraine war) and differing perceptions by the public in the West and in China already give us an idea of how differently people perceive the reality of their lives on the basis of the information available to them.

In terms of our company, we are already combining the transformation process in the aforementioned four initiatives, with the aim of aligning our company with future customer needs. We can already roughly see where we are headed. I expect customer inquiries to be handled by chatbots in a few years’ time. Securities portfolios will be managed via the blockchain. For the most part, order processing and securities management and custody via securities accounts will no longer exist in their current form, neither in institutional business nor in the retail segment. Whether information on real estate will still be entered in the traditional land register is also an open question. Here, too, examples from other countries show the changes that are already taking place in everyday life as a result of the possibilities offered by digitalization.

Following on from these prospects, which give us a customer-centric view of future opportunities that need to be seized and shaped, I would like to take this opportunity to talk about a few initiatives where we as an organization are already one step ahead and are vigorously implementing new measures and integrating them into existing processes.

We create energy audits and derive measures at property level to achieve compliance with the Paris Climate Pathway for almost all of our properties. We have introduced the Deepki Ready platform as a centralized location for collecting and analyzing ESG consumption data.

We have launched pilot projects for active decarbonization of the portfolio by deepening the collaboration established in 2021 with our partner Recogizer on AI-based investment management and by significantly reducing energy consumption in our international portfolio. We have defined standardized green leases clauses that will be integrated into all new leases. We have published our first sustainability report and are currently preparing the second edition. We are involved in the Social Impact Initiative of the ICG (Institute for Corporate Governance in the Real Estate Industry) aimed at defining “S” metrics. Through these activities we are making a contribution to ensuring that current developments and requirements are incorporated into the social component (“S”) in the development of ESG criteria.

In turn, digitalization encompasses all parts of the Real I.S. value chain, while also including the interfaces in service provider cooperations.

There is no end in sight to the uncertainty – it is set to persist for decades. Digitalization is permanent and is likely to accelerate even further. However, the power to shape it remains – as it always has done – with us as entrepreneurs, with a view to changing customer needs, as well as with regard to emerging market opportunities.