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by Ákos Budai | INTERVIEW Andreas Kozma, Founder & CEO of integrated real estate management system provider iREMS International, talked to Property Forum about the value of data for property companies and shared his recommendations for property owners regarding their data management processes. Many other industries have already recognized the importance of data. How are real estate companies approaching this topic? Business leaders recognize the importance of data in principle, but many of them are not willing or do not know how to take all the necessary steps to have good data. The real estate sector is a little bit behind the curve as it is perhaps more conservative as an industry and also because the data required to describe the financial performance of real estate assets is very complex. When I became involved with real estate almost 20 years ago, one observation I had was that the data environments were much more complex than in other industries, with more data points and interactions harder to model with an IT system. That is why it is not surprising that companies struggle when implementing IT systems. What do companies usually struggle with the most? A common situation is when the task of building a reporting software is simply delegated to IT without specifying the underlying business and reporting requirements. Consequently, they will focus on other metrics like how popular the software is instead of understanding whether that chosen solution meets the organization's requirements. Given that in real estate, data requirements are very diverse and come from different sources, they need to be integrated in non-trivial ways. Integrating systems is quite challenging in general but in the real estate industry’s data-heavy environment, it becomes even more difficult to integrate data sources from different systems. The more separate software packages a company tries to integrate, the more problems it will face with creating and maintaining those data interfaces. Who is usually the person within real estate companies that is responsible for data management? Is the selection of this person usually a strategic decision? It should be a strategic decision, but it seems like sometimes it is not taken seriously enough by top management. The obvious choices are asset managers and CFOs. Asset management needs good data to make the right decisions and the CFO needs to have good reports for controlling and reporting, so both are valid choices. An ideal situation is having data-aware asset management who can formulate information requirements alongside a CFO who is also able to communicate with the asset management team. Both sides need to be able to understand each other and it does not really matter which one takes the lead as long as they coordinate with each other. Another potential challenge that comes to mind is harmonizing data across borders. Multi-national portfolio managers must have different ways of collecting and using data in each country. How can this challenge be managed? When a portfolio becomes international, the level of complexity increases yet again. More data needs to be connected, synchronized and coordinated. The complexity of handling different legal requirements in terms of invoicing, reporting, and accounting, and the handling of financial data in different currencies add another layer of complexity, which means that the design and the structure of the software needs to be even better thought through to handle all these different requirements. The challenge is to build a data architecture that allows to harvest each type of data at its source where it is generated. The data then needs to be processed and transported for storage to a central location, where it is readily accessible for transformation and assembly by many different types of reporting requests. To make it more complicated, when collecting the data you need to take into consideration both the geographical origin and the functional modules such as operational expenses (OpEx), cost of financing or capital expenditure (CapEx). You can compare this exercise to urban planning where physical production sites need to be connected by transport links to areas of consumption. In the real world, we call it supply chain management, in software engineering you could call it data logistics. In your opinion, what attributes should successful real estate management software possess? Obviously, a software provider needs to know how to write software which can provide the desired functionality and include the many distinct features that need to seamlessly cooperate with each other. We need to know how to work with large transactions and data volumes, how to ensure that reports are running fast and systems are resilient and self-healing. That is already quite a challenge that many IT companies are struggling with and it is just one part in which tech, IT and software engineering know-how are particularly important. The other area where our craft needs to be good is understanding the business logic and the language of our clients. In other words, we not only need to be able to listen to them tell us what they think they need. Often, we also need to understand the underlying business requirements so that we can help them to understand what they really need. The perceived and the final, best practice requirements are not always in line. To arrive from one to the other is a process containing change management, business process analysis and data analysis activities. This is on the business side of the big divide, which often separates IT experts from the business world. I earned a major degree in business and a minor degree in software engineering at the University of Zürich as it was important to me that I can understand the language of business professionals while being able to communicate with IT specialists. Understanding both sides is in my view the main ingredient to providing a successful IT platform in real estate. In terms of the size of a portfolio and the phase of the business cycle, when is a good time to invest in new software? I have to add one more important principle that real estate companies should follow, which often we do not see. That is seeing data as a financial, digital twin of a building. If the digital image of the building is scattered in several systems of service providers, Excel files and so forth, then it is much harder to obtain a unified image of the financial situation of that building. It makes it that much harder to create reports and eventually take the right decisions. Funds should see the important value of a unified repository of financial information that they control but that also needs to be built up and needs to be invested in. Many funds do not recognize that. The question to be asked should be when is it a good time for an investor to start its own financial data model and collect its own unified data. A good moment is in the current period, for example, when it is hard to undertake transactions due to the difficult economic environment. Teams have more time to clean up and streamline internal processes so it is a very good moment to work on those requirements and definitions, to figure out what financial data is needed. That will then give the set of business requirements, based on which the relevant system specifications can be created. Those specifications in turn allow to choose and successfully implement the right system(s). In the end, investing in data management can also help with cutting costs, which is an absolute high priority for many companies right now. Yes, indeed. Cost control both within data processing and within operating the income-producing assets is a major priority, as it constitutes one-half of the yield calculations. However, it cannot be an end by itself. The reduced costs and fewer errors actually come as a bonus from a well-designed and well-executed target operating model combined with a well-designed IT platform. If the specification is designed in a simple, straight-up way, then the efficiency gains and cost savings will follow automatically. Before you can have the right software, you need to have the right data. How can companies collect high-quality and complete data on their assets? Once again, real estate is more complicated than other industries, in that we have a higher number of players compared to other businesses. We have valuators, property managers, accountants, asset managers, facility managers, etc. This means that even for a smaller-sized portfolio we can easily have 10 different external companies which all need to obtain and provide certain sets of information and they all have their own data standards and IT systems. As an investor, you can ask all of these companies to provide certain Excel spreadsheets and if those are well-standardized, you can integrate them into your own data landscape. However, even though this approach is easier to set up initially, it is very hard to scale up - It is difficult to formalize properly, it is quite labour-intensive and prone to errors. Another possibility is to interconnect multiple systems. There are several international real estate service providers who specialize in interfacing their own systems with their clients' systems. Nonetheless, every data bridge or interface between systems is difficult to build and maintain, so this route can also be very challenging. A new way that is emerging and we have had good experience with is actually for the landlord to extend the scope of their system by asking service providers to conduct their transactions on the system of the property owner. That is the safest way once the system is set up because it is then guaranteed that the people who work on the system do not need to do any reporting - data is automatically produced in the landlord’s system based on explicit data entry standards and validation rules. Another big advantage of this approach is that all financial data is available to the landlord from the onset, without any additional effort. One thing that is still usually difficult is to measure the success of an ESG strategy. How can IT systems help companies overcome this challenge? What is most real estate specific is the E (Environmental), because of the heavy carbon footprint of buildings, both during construction and operational phases, so I’d focus on that and divide the question into two parts. The first part is the technical information that can come from building information management (BIM) systems with sensors measuring the consumption of the building. With this, we can identify where we might lose energy and then fix those problems. The second part is the financial information. Energy consumption must be re-invoiced to the tenants, providing a direct and straightforward way to inform them of how much energy they are consuming. Simply by using the energy re-invoicing process in an integrated fashion, we can extract a lot of ESG knowledge like the tenant's consumption footprint and the energy consumption of the entire building for each type of energy. If the information is properly collected during the invoicing process, then it can also be rolled up to the country or portfolio levels. If we then start collecting this information in periodic intervals, we can obtain entire time series of energy consumption data, which is the basis of any sophisticated ESG reporting activity. Tags: asset management BIM data ESG interview iREMS software

2022 has been a remarkable year at iREMS. Not because everything was so easy. More so because the iREMS Platform made extraordinary progress thanks to a great cooperation with our partners and clients despite (maybe because of?) the difficult circumstances. To start I would like to thank our partners, the Real Estate Center of Excellence (RE CoE) team at PwC PL, for the intense and inspiring cooperation that saw the RE CoE Managed Platform mature into its second year of live operation. Furthermore we are really honored and grateful for the successful cooperation with an ever expanding range of service provider companies to jointly deliver higher efficiency based on the iREMS Platform in close cooperation with our landlord clients. Thank you CBRE Hungary, CBRE Slovakia, Colliers PL & RO, Cushman&Wakefield Czech Republic, Savills Poland, White Star Real Estate Poland, WSRE Czech Republic, WSRE Hungary, Eston, Dome Facilities, BPO, Savills Cz, TPA Group Cz, ASB Group, TPA Group Pl, Active Retail AM. Personally I would finally like to thank the entire iREMS team for their amazing work. I really enjoyed the great work atmosphere, the way how everybody held up even in moments of great pressure, and the constant focus on delivering better solutions. We are proud of jointly achieving the following milestones and more: 👉 iREMS Dashboard goes live - after years of data design and research our new product, the iREMS Dashboard successfully went into production with several clients. Full integration with iREMS ERP and a very flexible KPI model make it easy to create and use dashboards tailored to individual needs. 👉 Management and accounting reporting - we further solidified the integrated financial reporting and consolidated accounting layers. For example, ever more complex NOI reports can be created by the business side without any programming required and can be visualized in multiple delivery channels, such as web- and Excel-based dashboards, web portal and mobile. 👉 3rd generation S/C Reconciliation Engine acceptance testing completed - full-detail and fully automated reconciliation runs provide not only automatic invoicing, but more importantly controlling and reporting-level input into financial reports at the push of a button. 👉 Our fully automated utility re-invoicing and meter management proves itself in challenging real-world scenarios - compounded complexities, such as mixed metered/pro-rata allocations, correction factors, sub-meters, lease terminations and unit transformations were all successfully navigated. 👉 Multiple Landlord-Controlled Platform (LCP) implementations proved onboarding speed gains and benefits of Unified Data Model - simultaneous multi-country rollout scenarios involving multiple service providers produced very short implementation and go-live times. 👉 iREMS Academy continues to aid onboarding and coordination of multiple (internal and external) teams - introduced during the pandemic, our Learning Management System (LMS) combined with our iREMS Onboarding Target Operating Model was surely a large factor for the above mentioned speed gains in new project implementations. Our plans for 2023 We look forward to a hopefully less hostile, but equally challenging and inspiring 2023 with exciting new project initiatives in the areas of ESG reporting and compliance tracking, a deep focus into project controlling for large development projects and much, much more.

Finally back at Expo Real this year! We are really excited to introduce our cooperation concept with PricewaterhouseCoopers (PwC). Challenging times present new opportunities. When investment uncertainties and risks rise, it is exactly the right time to fine-tune your process management and reporting, so the input to your decision making process is up-to-date, exact and prepared for the coming investment opportunities. Visit us at the PwC Stand #A2.411 We will be able to show you the iREMS Platform in action and demonstrate how PwC was able to build an amazing service leveraging the strengths of this platform, delivering centralized lease contracts management, unified reporting throughout your entire portfolio, higher automation, integrated workflows, FX - handling, precise data => a single source of truth for your investments. Please contact us to book an appointment at exporeal2022@ire.ms About the PwC Real Estate Center of Excellence PwC Real Estate Center of Excellence managed from Warsaw has developed an integrated offering for Real Estate funds. As a part of this proven approach the PwC RE CoE team is able to provide to clients the following services: Lease Data Management; Lease / Property Accounting (including payments processing); Business Analytics / Management Reporting; Accounting and tax compliance services; Corporate secretarial / Legal services; IT and target operating model consulting and implementations. This offering has great advantages, such as: One source of truth for accounting, tax, management and property reports, guaranteeing premium consistency and data quality; Fully scalable (allows seamless onboarding of newly acquired investments and prompt preparation of properties for sale) with flexible pricing model with fixed price for most services; and Eliminates all required IT consideration on the investors’ side as it is embedded in our service. Many funds and asset managers appreciate focusing on their core business and having all the information needed for the decision making and compliance (including operations and accounting / reporting). Why PwC chose iREMS 1. Advantages of the Integrated iREMS Platform Robust, coherent and up-to-date information for decision making (supported by unified data entry standards) Flexible high-power reporting that is entirely fed by the underlying transactional system Operating model enhancement - unified cooperation standards for multiple providers, ensuring better service control and quality for landlords, efficiency improvements Favorable Price/Value ratio 2. What We Are Famous For One of the leading integrated Real Estate Management platforms in CEE, with accounting and tax localizations provided in cooperation with PwC experts Broad experience in multi-country implementations in CEE (with proven track record of ensuring cost efficient, agile system implementation and training approach) Highest level of rules-based automation Fully integrated and latest generation, modern IT architecture Cloud-native hosting and operating model We are looking forward to sharing more information about our services!

Securing accurate, meaningful and timely data for real estate investment deals remains a challenge even today in the age of PropTech, Big Data and Cloud. A few hands-on tips and observations from an industry veteran.

We are looking forward to a great panel discussion at #PraguePropertyForum2022. iREMS's CEO Andreas Kozma will be there emphasizing the significance of data quality when investing. “Data is the new soil”, as David McCandless, London-based author, data-journalist and information designer points out at one of his TED-talks. We could not agree more. Especially in challenging times like these, owning and controlling your data, being able to compare, analyze, look for tendencies in varying data visualization formats is the key to your business.

The team at Savills PL under Michal Wróblewicz just completed the first invoicing run from iREMS. All 150 leases of Sky Tower were uploaded and validated literally in a matter of a few days, despite extreme time pressure. Congratulations, well done!

#iREMS

Adventum Group decided for the most efficient “one platform for all service providers” concept, which gives them the advantage of a unified, transparent base to a scalable investment platform. They chose the iREMS platform to connect their asset management team with property managers and accountants from multiple external service providers in one environment, where they can work concurrently with a single source of truth for all financial information. iREMS will provide a unified, homogeneous reporting platform - integrating multiple countries, currencies and GAAPs - that is fed by fully validated and integrated data obtained automatically from the transaction processing activities of the service providers on the iREMS Platform. Benefits of this high automation level are operational cost savings, reduced error rates and improved data quality. “Choosing the iREMS integrated service model allows us to delegate a lot of the management and training of external service providers to the iREMS team. They ensure that all users have the necessary knowledge and training, and that data entry standards are enforced. In our Asset Management team this frees up a significant amount of time that can be spent on higher value-added activities. A well managed, efficient implementation process keeps costs low and ensures fast returns on our investment.” says Kristóf Skwarek, Chief Financial Adviser at Adventum Group. Using the automated onboarding process of iREMS, the project team was able to upload the first batch of assets, including the KÖKI shopping center in Budapest and five office buildings in Poland, into the system within less than two months.

It’s been an extraordinary year. With COVID we were faced with new problems, which we had to solve with completely new ways of thinking. One thing led to the next and before we knew it we had the pillars of a new platform: increased productivity through well-organized remote work, flexibility through cloud-based delivery models and an automated learning platform that allows our clients to implement iREMS much faster, simpler, cheaper. Gone are the days of standard ERP systems where consultants had to spend days and weeks at the customer site. This fall we were able to exceed our new clients’ expectations with onboarding speeds and efficiency never seen before. We also launched the iREMS Dashboard, which automatically feeds from the vast data pools of the iREMS platform and presents highly condensed information in a powerful, yet simple web UI. Starting last spring we had the opportunity to partner with an industry-leading company that has a strong background in business automation and that shares our vision of high-quality, real-time reporting. Stay tuned for more information on this next year. I would like to thank our clients who keep motivating us to continuously improve the iREMS platform based on their suggestions and ideas. It is a great privilege and pleasure to work with all of you! Thank you very much!! Last but not least, my warm thanks go to the entire iREMS team for putting in this amazing effort and making our vision come true. None of this would have been possible without each and every one of you. All the hard work allows us to cooperate ever more efficiently and without sacrificing the fun. Every new work day is a pleasure that I look forward to. Thank you and looking forward to leap into the New Year together! Merry Christmas!

Cascading - The answer to busywork With so many moving parts involved in managing the utility invoicing on a property, it's no wonder that many parameters can change. For example, there can be a change in the price used for calculating utility expenses re-charged to the tenants, or the reference on an invoice line on the utility invoices needs to change for all the tenants in the building. In iREMS, these changes and many more can be managed easily with the cascading feature used in utility invoicing. The underlying concept is that parameters such as the price or the invoice line reference can be configured on multiple levels in the system and the configuration on the higher level applies to the lower levels as well. If cases are met where a specific configuration should override the higher level setup, only the more specific part needs to be configured separately. This ensures that a single change with a wide blast radius won't require you to perform changes in numerous parts of the system. Temporality allows you to focus only on invoicing While it is true that most of the time a utility invoice is issued for a single month, in some cases the performance period must be adjusted. Various events can affect the performance period, a tenant can leave in the middle of the month, a unit can be closed, the utility meter might be shut down, etc. In iREMS all these and more can be modeled, and the utility invoicing handles any temporal changes for you when the invoice is generated. This eliminates the need to keep track of any changes that can affect the invoice generation, as all the variables are handled for you. Tailor your invoice to your client's requirements We understand that clients can have a wide variety of requirements on what information they wish to be displayed on their invoices. To provide the necessary transparency, iREMS allows you to meet these requirements, by configuring a Metered Invoice Reference Template. The Template will govern what text will be displayed on each of the invoice lines on the invoice. You can have any text on the invoice as you wish, and you can also combine your text with so-called Wildcards. Wildcards are interchangeable fields that are switched out on the invoice line to the actual relevant information when the invoice is generated. E.g. the [Meter ID] Wildcard will put the ID of the Meter on the invoice line from which it was generated from.