Powerful Tool for Real Estate Managers

The real estate sector is in a state of flux. The importance of real estate as a form of investment is growing. Demographic change and career flexibility are changing attitudes to property over the long term. Tenants are becoming more demanding and the landlords’ market is turning into a tenants’ market. At the same time, globalization is increasing the pressure on the industry with mergers, real estate acquisitions and sales being conducted at an international level.
In view of these factors, the challenge facing property managers is to manage property assets and land transparently and comprehensively. This applies to both professional real estate companies (commercial real estate managers) and companies that use real estate intensively in their core business (corporate real estate managers) such as the public sector, financial service providers and supply, retail and telecommunications companies. SAP has taken these developments into consideration with the release of mySAP ERP 2005, adding numerous key functions to the SAP Real Estate Management component and expanding existing features.

Managing realty efficiently

A key innovation is realty management. This enables inventory management of land and of rights equivalent to real property, such as the heritable building rights or permanent dwelling rights. Ownership and possession relations can be shown along with the associated rights and burdens. All data relevant to an evaluation of realty is clearly mapped. This includes information from property contracts and registers subject to public law – for example relating to ownership relations, rights and burdens, land charges, old and inherited pollution, building rights or nature conservancy. Extensive reporting functions assist real estate managers in analyzing the realty portfolio and checking the consistency of the available data. They can also prepare balance sheets for real estate assets from an ownership or contractual point of view. What’s more, automated payment processes ensure efficient realty management e.g. for billing of real property rights entered in the land record.
Functions for mandate and condo management have now been integrated as standard in the SAP Real Estate Management component of mySAP ERP 2005. Previously, these were only available as add-ons. Real estate managers receive a standardized and comprehensive overview of data on property owned by third parties, leased property in separate ownership and all management processes for condo fees (service charges) or jointly held funds, for example. Business-management processes such as billing of incidental costs, control of accounts, and payment transactions can be performed in parallel with leasing and tenancy business without having to change to a different application. This supports controlling and facilitates efficient preparation of budgets/economic plans and systematic control of reserves, for instance.

Shorter periods of property vacancy, higher rental income

The current version of SAP Real Estate Management also features extensive functions for integrated management of interested parties. For instance, rental properties can be transferred automatically into the available properties section when a tenant serves notice and the process mapped from end to end – from the rental inquiry to the rental offer and rental agreement. Vacant properties are searched for on the basis of requirements, like size, location, price, furnishings/fittings and general data on interested parties. In addition to the master data, infrastructure features can also be recorded, for example the distance of a property from the public transport.


Once a suitable property has been found, the real estate manager creates a rental agreement offer at the touch of a button and monitors its status. The offer contains all the relevant data on the interested party and the rental property including the sales particulars. This enables offices, residential properties and shops to be relet faster, prevents periods of vacancy and generates higher rental income.
If a property is rented or leased, an agreement management system fully maps the tenancy agreements. Thanks to integration with the debtor and creditor accounting system, changes to agreements are automatically factored into the accounts.

Finances under control

The enhanced integration of SAP Real Estate Management in mySAP ERP Financials speeds up real-estate-related accounting processes for rental income, billing of incidental costs and maintenance expenditure. For example, the “One-Time Postings” function enables real estate managers to post records in the Finance system with reference to account-assignment data in SAP Real Estate Management and to do so quickly and easily in real time. This results in faster collection and reduced risk of loss of rent. To do this, SAP has considerably simplified the user interface for the posting of records and adapted it to the needs of real estate management. Active accruals – that is expenditure before the accounting date – and passive accruals, like leasing income, are also automatically calculated and correctly posted.
The real estate application is also linked to the central partner management system of mySAP ERP and the SAP Financial Supply Chain Management component (SAP FSCM) of mySAP ERP Financials. When leasing business premises, therefore, a sales-dependent rental tariff (sales-related rent) and supplementary payments for incidental costs can be calculated promptly, invoices sent out more quickly, rents paid faster and liquidity increased. All controlling data can be called up conveniently via online reports which enables real estate managers to perform evaluations much more efficiently.

Paperless processes

The management of real estate regularly entails a lot of correspondence. With SAP Interactive Forms by Adobe as a core component of mySAP ERP 2005, form-based mass correspondence such as invoices for incidental costs can be processed quickly and easily. SAP Interactive Forms by Adobe also controls form-based processes, such as complaint reports or maintenance orders, by largely paperless means. Internet-supported application and order forms are linked directly to the business processes in SAP and can be filled out by tradespeople or building supervisors round the clock, sent out and processed in the service center of a real estate company. The integrated workflow simplifies cooperation between tenants, service providers, suppliers and real estate managers, speeds up processing times and reduces errors. Services and maintenance orders can be executed promptly. This enhances tenant satisfaction and facilitates faster collection of service charges.
SAP has also adapted the real estate application to international business processes. Localization work for Austria, Italy and Switzerland takes account of country-specific requirements. Plans are underway to make SAP Real Estate Management specifically available for Denmark, Finland, Portugal, the Czech Republic and Japan in future.

Integrated processes, better decisions

Higher value of real estates
Higher value of real estates

The SAP Real Estate Management component of mySAP ERP 2005 provides real estate managers with an efficient tool that enables them to map the whole lifecycle of a property from planning to sale by means of an integrated and – wherever possible – automated process and in so doing increase revenues. The transparency of the real-estate-relevant data provides a sound basis for investment decisions.
Company-specific processes such as in-house billing procedures, audits or formats for reports and workflows can be adopted or defined without the need for any modifications. Powerful migration tools and special programs also simplify the changeover from the previous version to the updated solution.

Future-proof solution

SAP will continue to develop the real estate application on an ongoing basis. There are plans to integrate real estate management and reporting in CAD (Computer Aided Design) software as standard. The Duet software co-developed by Microsoft and SAP also simplifies the link between SAP Real Estate Management and Microsoft Office products.
The solution supports not only large real estate companies but also small and medium-sized residential construction companies. Swiss ISS FM Services AG (formerly Edelweiss Facility Management AG) with 700 employees and German Gemeinnützige Wohnungsgesellschaft (BGW) with 125 employees are already benefiting from the advantages of cutting-edge, integrated and flexible real estate management with SAP.

Dr. Andreas Schaffry
Dr. Andreas Schaffry