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Urban Future – Living in a Megacity

Rapidly advancing urbanisation is presenting cities with major challenges and is creating completely new business models.

Cities in transition

More and more people are drawn to living in cities. Today, more than half of the world's population lives in urban agglomerations; by 2050, three quarters of humanity will live in cities according to the United Nations. Urbanisation is a global phenomenon. Even though the momentum in emerging and developing countries is particularly high, the industrialised countries are also affected by this trend. It is estimated that by 2030 there will be more than 40 megacities, that is, cities with more than ten million inhabitants. That figure was just 28 in 2014.

Rapidly advancing urbanisation is presenting cities with major challenges. Whether it be climate, energy, transport, affordable housing, food supplies or mobility, solutions must be found that prevent cities from collapsing and preserve the quality of life of the people who live in them. New concepts such as e-mobility, urban farming, collaborative living and smart cities are developing rapidly and creating completely new business models.

However, urbanisation not only means an increase in urban populations, but also the advance of urban living. And this is based much more on global values than on life in rural areas. National borders in economic and cultural life are becoming more open, and ways of life and market structures increasingly international. Providers of solutions for financing and managing property will only garner success in the long term if they adapt to these trends and adopt a global perspective when implementing their business activities. 

Part of an international network

The megatrends of urbanisation and internationalisation are also reflected in the Aareal Bank Group. Within the Bank’s Structured Property Financing segment in particular, both networking and a cross-border presence have been key to long-lasting success for years now. Indeed, the effects of urbanisation and internationalisation are also steadily increasing in the Consulting/Services segment.

 Structured Property Financing

Aareal Bank Group provides structured real estate financing solutions in more than 20 nations, across three continents in Europe, North America and Asia. Many of the solutions provided by this segment are cross-border financings.

According to Christof Winkelmann, member of the Management Board at Aareal Bank, “The market for commercial real estate financing has changed considerably in its structure and requirements over the past 30 years”. “Globalisation and urbanisation are increasingly influencing commercial property financing. Our clients now expect us to provide them with comprehensive cross-border financing expertise and experience, a high degree of structuring expertise as well as in-depth knowledge of local markets and industries.”

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Our Unique selling propositions

Aareal Bank has positioned itself according to these requirements: "For many years now, cross-border financing has been the rule rather than the exception for us, and our structuring expertise is particularly evident in international projects, which are often characterised by a high degree of complexity and a large number of partners", explains Winkelmann. “Our USPs also include support for local markets and our focus on office buildings, hotels, shopping centres, logistics and residential properties.”

Winkelmann’s future plans involve strengthening the Bank’s presence in attractive markets. “We are well on the way towards implementing our strategy. The past financial year was shaped by a number of international deals and further expansion of our business in North America. Furthermore, we were able to reinforce our network of syndication partners. The fact that we recently received the 2017 European Property Finance Award "Financial lender of the year" from the trade journal Property Investor Europe is great affirmation of our expertise and shows that our strategy is on the right track.”

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The second segment of Aareal Bank Group is Consulting/Services, which is also increasingly reflecting the urbanisation and internationalisation megatrends. “Rapid growth of the urban population places new demands on the property industry”, says Ortmanns. “By providing solutions for process optimisation and cross-sector collaboration, we are supporting our customers in meeting these challenges.”

Aareon provides the Aareal Bank Group with the leading consulting and systems house for the property industry in Europe, with a range of fully integrated solutions. More than 2,800 customers across Europe manage over ten million residential units. “In establishing a Europe-wide presence with various subsidiaries in France, the United Kingdom, the Netherlands, Norway, Austria and Sweden, we have opened up new markets”, says Ortmanns. “This enables us to offer our customers an even broader range of services, anticipate trends earlier and bring best practice solutions to the different markets more swiftly.

Years of experience in this sector have afforded us an outstanding market position in the Consulting/Services segment. Not only do we offer our customers a unique combination of IT and banking solutions, but we also have in-depth knowledge of processes and systems and we are characterised by our comprehensive digitalisation expertise”, explains Ortmanns.

The rapid expansion of digital solutions and the opening up of adjacent markets have created attractive growth prospects for the Consulting/Services segment. This also includes cross-sector process optimisation between Aareal’s housing industry and the energy sector, using the software solutions BK01 eConnect, BK01 immoconnect and Aareon Change Management.

Automated payments and bookkeeping across industries – in 50 seconds: experience the interaction between BK01 immoconnect and BK01 Operating Cost Management:

The internationalisation strategy defined in the "Aareal 2020" programme for the future is being consistently implemented in the business segment: in 2017, Aareon took over, among other things, Kalshoven Automation B.V. and the property IT division of mse Group. Aareon intends not only to complement its solutions portfolio and rapidly expand its digital solutions, but also to enter new market segments. “The development of new markets is central to our strategy. The acquisitions made in the past year are exactly in line with this goal and will enable us to continue our profitable growth strategy”, says Ortmanns.

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Kalshoven Automation B.V.

Kalshoven Automation B.V. is the leading software specialist for the commercial property market in the Netherlands. The company has been developing high-quality IT solutions for Dutch property investors, property managers, private residential owners and owners’ associations for over 25 years. In addition to ERP solution REMS (Real Estate Management System), this includes platform services and solutions for property management.

mse Gruppe

mse Group's property industry IT business includes the sales companies mse Augsburg GmbH and mse Immobiliensoftware GmbH as well as the development company mse RELion GmbH. The acquisition will enable Aareon Smart World to add a Microsoft-based certified ERP solution to its offering and thus enter new markets.

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Our USPs as key success factors

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