Data and data analysis are important ingredients for an asset manager to produce a good risk assessment. To raise asset management to an even higher level in our country, Yardi Netherlands believes that much more transparency must be created.
“If you are able to see what your competitors are doing in the market you will be able to improve your own decision-making; of course this also applies the other way round. In a positive sense, all parties can learn a lot from each other if they are willing to exchange information earlier and more often,” says Jan-Willem Jeucken, Europe’s regional manager at Yardi.
During the Yardi session at the Vastgoedmarkt Transformatieplein on Tuesday 4 June 2019, Jeuken will argue for a more transparent real estate market. “In the United States, we know Yardi Matrix which provides a great deal of visible market insight. By gathering all the required real estate information in one platform and making it easily accessible, real estate professionals are able to make an important contribution to a properly functioning real estate market. That said, it’s true that in the United States, there is much more publicly available information compared to Europe.”
According to Jeucken, the visibility of real estate data is hugely important when you want to determine the value of a portfolio accurately. “Based on the data that is available, we can already see many connections to arrive at a good valuation. And in the future, numerous additional possibilities will become available.”
Extra data and better analysis
Jeucken also believes that extra data and indeed better analysis can be of great value for other issues such as sustainability within a real estate portfolio; something that Yardi expects to take further steps in over the next year or two. “More insight can be gained regarding the carbon footprint of a portfolio which means asset managers can make better, more informed social and ecological decisions. Something the industry should not run away from.”
On the first day of The Real Estate Meeting Point – PROVADA, Jeucken will meet with representatives from Cushman & Wakefield, NSI and Kempen. “Since 2012, Kempen has invested a great deal in building an effective data and technology infrastructure to ensure high-quality visualisation of the available information,” says portfolio manager, Lucas Vuurmans. “With the help of technology and data across three layers (real estate, real estate companies, and funds), all the decisions we make are objective, rational and consistent,” says Vuurmans. During the first three years, everything has been automated. After that, the European strategy with eighty companies expanded to one global strategy with more than three hundred companies. “From about 2016, the quality of the underlying real estate has been determined. All objects are analysed and valued consistently.”
This approach is fully automated and integrated into the investment process. “This means we have an assessment for all our real estate assets and can be 100% transparent to our customers. Whether it’s the debt position, the carbon dioxide footprint, the overhead costs. We can show it all.”
With this data, Kempen has built up knowledge about the state of the retail sector, among other things. Vuurmans refers to the performance of shopping centres. “They are having a hard time due to the global rise of e-commerce, for example. We have insight into what effect that has, and which centres in the world will ultimately win.” He also sees new questions coming to the forefront. “The large Dutch pension funds nowadays require information about sustainability much more emphatically, but we already put the information into our systems in 2012. It is looked at in two ways: on the one hand, the performance towards ESG targets and, on the other, the carbon dioxide footprint. This makes it clear, among other things, what investments are needed to be competitive. A portfolio with a high carbon dioxide footprint thus receives a lower rating than a better-performing portfolio. We are unique in that.” Customers, especially pension funds, think that transparency is great. “With the information they get, they can meet the information requirements of their regulatory authorities.”
Live insight into the current state of affairs
“Since 2016, NSI has invested a lot in building a data warehouse,” says head of investor relations, Dirk-Jan Lucas. “We virtually have live insight into our current situation. Information is stored automatically every day, sometimes twice a day. A new lease is visible in our occupancy figures one day later. In the past it was different. We were two or three months behind with our occupancy figures.”
This information can then be used for the rapid production of internal and external reports, among other things. “Thanks to our data warehouse, we can achieve enormous acceleration. When I first arrived in 2016, we spent a few weeks producing a quarterly report. Now we can close the books on the fifth day of the new quarter and the correct figures are available the next day.” The design of the data warehouse has, says Lucas, also led to “finding the truth”. “How large is a building? The same building used to have different measurements stored in different locations. But now there is one truth, and everyone uses the same numbers.”
In addition, every manager has a dashboard with data that is relevant to him/her. “That was the first step. We are now trying to strengthen our predictive power. We still have to do something about this. In the past three years, we have increasingly become a data-driven organisation. Among other things, we make analysis of the results of our flexible HNK office concept. This gives us a better insight into the yield differences between the different locations. We may have been able to do it in the past, but a good data structure makes it much easier. And it is now much faster.”
What does the future hold? Lucas supports Jan-Willem Jeucken’s plea for greater transparency. “I very much support that. We too would like to share (anonymous) data with each other more often. But what structure will that exchange take? Who then owns the data? Data is worth money. We must prevent being in a situation in which we have to pay for information that we supplied earlier.”
In addition, Yardi launched Yardi Elevate in the Netherlands on the first day of the PROVADA. “We can make predictive analysis based on data,” says Jeucken. “By combining all asset data on one integrated platform, you gain complete insight into the performance of the underlying portfolio. This creates better opportunities to generate higher income, to control costs, and to balance risks. This is how we take asset management to a higher level.”
Jan-Willem Jeucken was one of the speakers at the Asset Management 3.0 session held at the Provada event on the Vastgoedmarkt stand. Other participants included Santi Mayor, Cushman & Wakefield transformation manager Europe, portfolio manager Lucas Vuurmans of Kempen, and head of investor relations, Dirk-Jan Lucas of NSI. The session was led by real estate journalist Bert Pots.