Oct 25, 2020
Daniel Kraft, Partner at Stronghold
Invest, the leading property advisory, asset Management, fund
management and PropTech company in Northern Europe, joins Bold Founder, Caleb Parker, from Stockholm, Sweden, to talk property
company strategy around #PropTech and
Space-as-a-Service.
**The Group manages €40 billion
Euros of commercial real estate and has 495 million square feet
across seven countries under their management.**
In this episode
we cover whether property companies should become tech companies,
when it makes sense for PropCos to setup venture arms, and of
course Space-as-a-Service demand and valuations.
Daniel says becoming a tech
company could be a dangerous path for Propcos, but setting up a
venture arm could be a good strategy.
Demand for Space-as-a-Service is
disrupting the value chain in commercial real estate but
unfortunately current
valuation methodologies are preventing property from evolving to
meet customer demand. Within the next 5 years asset owners will
have to make a choice WHERE they’re going to sit in the new value
chain.
Connect with Daniel on LinkedIn
Connect
with Caleb on LinkedIn
If you have any questions or
feedback on this episode, email podcast@workbold.co
Value
Bombs
PropTech Investments
- Stronghold is a service led
company, which enables them to develop PropTech initiatives, test
them and then deploy across their portfolio
- Building data recorded via IoT
will become a huge asset to understanding how valuable a property
really is
- Property companies should be
looking at PropTech iniatives to improve performance
- But a property company becoming
a tech company is a dangerous path to pursue. The dynamic is very
different with a steep learning curve
- It could make sense for a
property company to have a venture arm. That can be a good strategy
for business development because you get to see pitches for
innovation and decide what to focus on in the property side of the
business to improve
- When you consider starting a
venture arm be very clear what outcome you are
expecting
- If the aim is to solve a
problem then make an investment from your CAPEX budget. But if the
aim is to see a return on investment then it should be done via a
fund vehicle
Space-as-a-Service
- There was a pre-Covid trend for
bigger companies moving to outsource office portfolios via
Space-as-a-Service
- The Remote working experiment
during Covid supports the drive for Space-as-a-Service
- For the first time people are
asking how the office is supporting business objectives
- The demand for
Space-as-a-Service is clear and will continue to increase it’s take
up of real estate portfolios on flexible terms
- This should impact property
values, but valuers are still taking a cautious
approach
- Current valuations
methodologies are preventing property from evolving to meet
demand
- Right now supply and demand is
moving away from each other
- Due to valuation methods assets
with Space-as-a-Service are still considered risky
- But we’re still in the early
stages of evolution of the industry when it comes to
Space-as-a-Service
- The value chain of
Space-as-a-Service is still evolving, and property owners haven’t
figured out where they fit in the new value chain
- Currently Stronghold is
actively looking to bring Space-as-a-Service into their existing
portfolio
- Within the next 5 years asset owners have to
make a choice where they’re going to sit in the value chain
- Focusing on identifying assets for investment
opportunities is one model
- Creating a service business to manage the asset
is another model
- These
2 models should be separate businesses
About Daniel Kraft &
Stronghold Invest
Daniel Kraft, Partner at
Stronghold Invest, the leading property advisory, asset Management,
fund management and PropTech company in Northern Europe.
The Group manages €40
billion Euros of commercial real estate and invests more than €1
billion Euros in new properties across Northern Europe annually
through it’s wholly owned subsidiaries, Newsec and Niam. As a Group
they have 1,800 team members across 40 offices, in 9 countries and
major cities like Stockholm, Copenhagen, Helsinki, Oslo
and Luxembourg.
- Newsec is their “full service property
house” which includes Asset Management and Advisory with 46 million
square meters (that’s over 495 million square feet) across seven
countries under their management.
- Niam is their private equity firm (the
largest in northern Europe focused on real estate) with assets
under management exceeding €3.5 billion Euros with a global blue
chip investor base.
Daniel is also Head of
Stronghold’s PropTech Ventures, and sits on the Board of numerous
portfolio companies.
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