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Transformation of the real estate and construction industry: empirical findings from Germany

Author

Listed:
  • Andreas Pfnür

    (Technische Universität Darmstadt)

  • Benjamin Wagner

    (Technische Universität Darmstadt)

Abstract

The German real estate and construction industry is facing a transformation, triggered by fundamental changes in technology, the economy and society. The purpose of this paper is to explore how these changes exert pressure to adapt on existing business models, while also offering opportunities for their further development. A model that attributes the transformation of the real estate industry to megatrends, specific structural change drivers, business models and the interaction of the groups of players in the value creation system is developed. The model is tested empirically by a survey. Structural equation modelling is used to measure the impact of various determinants of transformation and the relevance of adaptation strategies to the different groups of players. As a result, the study explains three impact mechanisms of the transformation in the real estate industry. The transformation originates from the occupiers, who need more flexible space and are focusing on holistic solutions that are not provided by the real estate industry. Service providers are striving to increase the efficiency of their traditional processes, rather than evolving new business models or services. The investors recognise the increasing importance of the occupiers but they are rarely pursuing the resulting strategies. Property developers recognise these requirements: their adaptation strategies most strongly question their previous business. For practitioners, the results point out the opportunities and risks of transformation and help to illustrate the need for change. For academicians, the results indicate a way to explain and measure the transformation of a value creation system.

Suggested Citation

  • Andreas Pfnür & Benjamin Wagner, 2020. "Transformation of the real estate and construction industry: empirical findings from Germany," Journal of Business Economics, Springer, vol. 90(7), pages 975-1019, August.
    • Handle: RePEc:spr:jbecon:v:90:y:2020:i:7:d:10.1007_s11573-020-00972-4
    DOI: 10.1007/s11573-020-00972-4
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    Cited by:

    1. Fernanda Antunes Batista da Silva, 2021. "Flexible workspaces within corporate real estate," LARES lares-2021-4dqc, Latin American Real Estate Society (LARES).
    2. Huihui Liu & Hui Yu & Hongmin Zhou & Xiantang Zhang, 2023. "Research on the Influencing Factors of Construction Enterprises’ Digital Transformation Based on DEMATEL-TAISM," Sustainability, MDPI, vol. 15(12), pages 1-22, June.
    3. Wolfgang Breuer & Bertram I. Steininger, 2020. "Recent trends in real estate research: a comparison of recent working papers and publications using machine learning algorithms," Journal of Business Economics, Springer, vol. 90(7), pages 963-974, August.
    4. Priyadarshini Das & Amer A. Hijazi & Duncan W. Maxwell & Robert C. Moehler, 2023. "Can Business Models Facilitate Strategic Transformation in Construction Firms? A Systematic Review and Research Agenda," Sustainability, MDPI, vol. 15(17), pages 1-20, August.
    5. Benjamin Wagner & Andreas Pfnür, 2022. "Veränderungen für Projektentwickler in der immobilienwirtschaftlichen Transformation – Netzwerkanalyse und Stakeholder-Interviews zur Bestimmung handlungsrelevanter Einflüsse und strategischer Anpassu," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 8(1), pages 35-78, April.
    6. Kyra Voll & Felix Gauger & Andreas Pfnür, 2022. "CREM perspective on home office—a consideration of the workplace and its mechanisms of action [CREM Perspektive auf Heimarbeit – eine Betrachtung ausgewählter Wirkungsmechanismen des Arbeitsorts]," Zeitschrift für Immobilienökonomie (German Journal of Real Estate Research), Springer;Gesellschaft für Immobilienwirtschaftliche Forschung e. V., vol. 8(2), pages 139-171, October.
    7. Voll, Kyra & Gauger, Felix & Pfnür, Andreas, 2022. "CREM perspective on home office—a consideration of the workplace and its mechanisms of action," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 133077, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    8. Isabelle Wrase, 2023. "An Analysis of Sustainability in Real Estate in Job Advertisements and Personal Profiles in Switzerland," Sustainability, MDPI, vol. 15(12), pages 1-19, June.

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    More about this item

    Keywords

    Real estate management; Real estate transformation; Structural change; Strategic management; Real estate trends;
    All these keywords.

    JEL classification:

    • R30 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - General
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Z10 - Other Special Topics - - Cultural Economics - - - General

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