01

It’s Time,
to Rethink Housing

My Tenant Is My Customer – A New Idea of the Customer for a New Era
Mrs and Mr Debski (photo)

My
Tenant
Is My
Customer

New Idea of the Customer for a New Era

Time for Change
The Debski family has been a Vonovia customer for some time now. When they decided they wanted to modernize their bathroom to include a walk-in shower, new tiles and electrical wiring, a modern wall-hung toilet and a heated towel rack, they contacted Vonovia’s head office.

While companies in other sectors reinvented themselves as service providers long ago, the real estate industry was able to retain the old business model of merely offering a supply of housing. But that time has passed in our sector as well. Tenants are customers who want to be treated as equals by their housing providers, asked for their opinions and provided with support. At Vonovia, we have since taken this important task back into our own hands. In doing so, we ensure a high level of availability with our own caretakers and craftsmen, our own on-site property managers and, since recently, our own service division for the residential environment.

When they entered the German real estate market, private equity investors began a new but difficult chapter in the story of the industry. However, they also set a process in motion that was long overdue – viewing the housing industry from the perspective of the market economy. Over the past twenty years, we have seen very good examples of this trend in other areas of society that provide basic services like health care, energy and public transport. While opening these sectors up to the principles of the market economy has not ironed out every imperfection, many aspects have improved considerably for customers compared with the situation two decades ago.

“Living well,” however, is a different challenge entirely. It is intertwined with one of our most fundamental needs, making it one of the most emotional aspects of daily life. Having a place to live, a home, is something we take for granted. This is why the matter is constantly in the focus of public debate from a social, political and societal perspective. Anyone who wants to drive change in this sector has to expect a lot of questions to be asked. This is exactly what the major private equity investors were confronted with.

Unlike countries like the United States or the United Kingdom, Germany is a country of tenants, meaning that the era in which private equity investors could focus on returns alone is now history. They are starting to realize that, in Germany, successful real estate management only works if you are prepared to take responsibility – not just for the properties in the portfolio, but also for the context in which the tenants live. And they are realizing that this can only be achieved in the spirit of collaboration – with tenants and the people representing their interests or, on a larger scale, with municipalities and the legislature.

Responsibility and collaboration: These are the aspects we want to address with Vonovia. And there is a third aspect that is crucial if we want our model to work in a market economy: treating our tenants as our customers. This means that the people living in our properties are no longer just passive recipients of a service. Instead, they are becoming active players with questions, wishes and expectations of their own. They have been more than familiar with their role as well-informed customers in other contexts for some time now. So they know that their home is not just a commodity, but requires care and has to pay off. They see how their neighbors live and have an idea of what might suit them, too. And if they feel at home in their apartment, they naturally also ask themselves whether the apartment will still work for them in ten years’ time.

“If I’ve repaired the heating system, I can always tell what the overall atmosphere in the residential environment is like as well.”

Michael Bandt, tiler, paver and mosaic layer at Deutsche TGS Group

Two man studying a plan (photo)

 

40.2

There are 40.2 million “most important places” in Germany. This is how many households we have in our country. As a landlord for more than one million people, we at Vonovia can help to ensure that these places are where people feel at home.

Time to Work
Michael Bandt did the tiling work in the Debskis’ new bathroom. “Fast, clean, friendly and good” is his motto.

Tool kit (photo)
Michael Bandt, TGS assembling a heating radiator (photo)

In terms of day-to-day corporate life at Vonovia, this new understanding means that we are, first and foremost, service providers and that we have to remain systematically focused on the customer’s perspective in everything that we do. Seeing things from the customer’s perspective means that we always have to think about what our customers need today – and what they will want tomorrow.

We can find this out by talking to the people who are actually living in our properties. We also have to take the background data into account by observing the age structure of our customers and analyzing demographic trends in our locations. We assess pension developments and look at the ideas that social institutions are coming up with. And then, we take a creative approach, setting our old ways of thinking aside and instead thinking about how we can ensure and improve our customers’ satisfaction.

300 x 2 Green Thumbs

Since 2015, we have had our own landscaping company in place to look after Vonovia properties. Our gardening teams mow lawns, trim hedges and tend to the 200,000 trees surrounding our units. They maintain walkways, look after the garbage collection points and optimize the equipment at our more than 1,000 playgrounds. This means that many of our customers’ questions relating to maintenance can be answered on-site and right away.

Our sense of duty comes before everything else: The most important thing for our customers is that they can reach us when they have a problem. We now have the issue of availability well under control. In order to improve our availability even further, we set up an additional customer service hub with more than 200 employees in Dresden at the start of this year and also extended our telephone availability considerably: We are now available from 7 a.m. until 8 p.m. from Monday to Friday, and between 8 a.m. and 4 p.m. on Saturdays. If a pipe bursts or a heating system breaks down outside of these hours, our emergency hotline is available 24 hours a day. In the summer of 2016, we will also be opening a new customer service location in Duisburg. This will bring the 650 employees currently working in various locations across the Ruhr region together in one location that will be ideally equipped to meet the demands of modern customer service.

“In the past, we simply rented out apartments. Nowadays, we ask our customers what they need.”

Norbert Rieger, responsible for customer service

Stefan Schmeißner assembling a shower (photo)

 
Stefan Schmeißner
is a plant engineer specializing in sanitary equipment, heating and air-conditioning technology and was responsible for ensuring the professional installation of the shower and other fixtures during the renovation work.

Norbert Rieger, Vonovia customer service (photo)

Time to Offer Support
Norbert Rieger is responsible for customer service at Vonovia. When dealing with customers, the concept of service is a top priority for him.

Stefan Schmeißner assembling a sink (photo)

>400,000

We attend a total of more than 400,000 on-site customer visits a year.

Stefan Schmeißner shaking hands (photo)

It is at least equally important to our customers that we are on hand to support them on-site. Today, more than 3,000 caretakers and craftsmen are working directly in and around our properties across Germany. We also recently decided to set up a separate segment encompassing all activities relating to the maintenance of the residential environment surrounding properties. This means that we mow our lawns ourselves, tend to the hedges and the more than 220,000 trees on our properties, renew walkways, perform paving work or optimize garbage collection processes. But our understanding of a residential environment where customers can feel at home does not end where the grass does. Our new service segment is also responsible for developing outdoor areas within our housing developments where people can play, relax or simply meet up with their neighbors. The residential environment service (Vonovia Wohnumfeld Service GmbH) is also responsible for maintaining and designing our more than 1,000 playgrounds. Our new residential environment service is currently in the process of establishing itself as the biggest of its kind in Germany – just like our craftsmen’s organization.

“We feel even more at home in our apartment with our new modernized bathroom.”

Debski family, Vonovia customers for more than ten years

Time to Enjoy
Fast, efficient, high-quality, modern – the Debski family’s bathroom modernization project was complete after only ten working days.

We are incorporating services back into the company whenever it makes sense to do so. This allows us to maintain constant contact with our customers and to keep control over the quality of, and responsibility for, the services provided. At the same time, we are extending our value chain, generating price advantages in the procurement process and boosting the efficiency of our processes.

Efficiency. For our business model to work, efficiency is absolutely crucial. After all, while our customers’ needs and wishes know virtually no limits, the same does not necessarily apply to their budgets. This is why we are systematically committed to standardization – and to size. The bigger our portfolio is in a certain location, the more efficiently it can be managed. This allows us to provide customers with things that would otherwise be unaffordable for them.

Mrs and Mr Debski on the balcony (photo)
Why Not Go Further? Ideas for True Well-Being – New Services Boost Customer Satisfaction and Make Customers More Loyal to the Company as a Result

Why Not Go Further?
Ideas for True Well-Being

New Services Boost Customer Satisfaction and Make Customers More Loyal to the Company as a Result

Team with Konstantina Kanellopoulos (photo)

Konstantina Kanellopoulos
is responsible for the “think tank” at Vonovia. This is where ideas for improving our customers’ day-to-day lives are born.

770

At Vonovia, one new idea has the potential to affect more than 770 locations across Germany at once.

Germany (map)Germany (map)

The great thing about progress is that it brings new opportunities along with it. Especially if economies of scale allow these opportunities to be exploited in an affordable manner. With its model of offering customers services at fair prices, Vonovia is playing a proactive role in addressing this issue and using it to maintain customer satisfaction. Equipping its apartments across Germany with broadband connections is only the beginning. Step by step, our company is tapping into new fields of business.

“Our business used to be about living space. Now, it’s about living,” says Konstantina Kanellopoulos, Head of Product Management at Vonovia, when asked to explain the difference between the former Deutsche Annington and the new Vonovia. Together with her 30-person team, Kanellopoulos is responsible, day in and day out, for looking at what new services Vonovia could offer to make its customers’ lives easier and to improve living standards. All ideas are welcome – provided that they fulfill three requirements: They have to meet real-life needs, be able to be realized in a fast, pragmatic manner and be affordable at the same time.

This means that Vonovia’s product management department essentially does what other companies refer to as product development. And it’s a job that the team does very successfully, too. After all, many of the ideas, big and small, are now making real improvements to customers’ everyday lives and expanding Vonovia’s business.

“We want every single idea that we put into practice to improve our customers’ everyday lives.”

Konstantina Kanellopoulos, Head of Product Management

Bathrooms are a prime example. Older customers need accessible bathrooms. Demographic change is already an issue that the company pays close attention to in its day-to-day work. So what happens if, instead of standard renovation or modernization measures, a customer wants a shower stall as opposed to a bathtub? Kanellopoulos: “Nowadays, that’s no problem. Quite the opposite, in fact. We can offer the customer a solution that he can finance without any trouble in the form of a fixed rent surcharge and can even give him various design options to choose from.” The customer response to this offering has far exceeded expectations.

Success stories like these serve as a source of motivation. After all, if it works for bathrooms, why shouldn’t it work for kitchens, too? Although kitchens are more complex, the experience gleaned from the bathroom process coupled with close collaboration with an experienced kitchen manufacturer mean that Vonovia is well on track to achieve the next roll-out.

Kitchenette (photo)

 
A new kitchen as a service – this has been part of Vonovia’s offering since this year.

Man at DHL parcel drop-box (photo)

Some ideas make their way to Vonovia as well: DHL has developed a type of mailbox especially for packages that can be installed in the hallways of multifamily residences. Pilot projects in Dortmund and Berlin have shown that this is also an attractive option for tenants in some cases.

170,000

Vonovia apartments across Germany are equipped with cable TV signals.

50,000

additional apartments are also being equipped with fiber-optic technology.

The product development process is one that is now running very smoothly. The fact that Vonovia has the necessary expertise available within the company, namely with its own craftsmen’s organization, is a big help. “We can discuss our ideas right away with the people who know our customers from their everyday work and who will ultimately perform the work on-site, too.” Regardless of this, the teams are constantly on the lookout for optimization potential when it comes to their processes: “There is a lesson to be learned from every solution. We make sure that we incorporate these lessons into the next idea.”

The product management team certainly isn’t facing a shortage of projects to work on. One idea that a team is currently looking into relates to household emergency call systems. Another team is developing solutions for mechanical burglary protection devices with the support of the police. The product management team has also been examining the idea of boxes that would allow customers to store walkers and strollers outdoors for some time now. It might sound like a small issue, but it’s the sort of thing that makes a huge contribution to peace in the neighborhood.

When it comes to new services, Vonovia is no longer restricting itself only to things that are tangible either: “If we are serious about wanting to focus on ‘living,’ then we have to delve deep into our customers’ everyday lives. One question that we have to ask, for example, is what sort of role we want to, and indeed are able to, play in the future as far as long-term outpatient care is concerned.” Konstantina Kanellopoulos’ team is currently thinking about possible options for long-term care support centers or long-term care services. The ideas being raised show that there is a lot of potential there.

Quality of Life Comes from the Neighborhood – The Eltingviertel District in Essen, a Pilot Project for Holistic Neighborhood Development

Quality of Life Comes
from the Neighborhood

The Eltingviertel District in Essen, a Pilot Project for Holistic Neighborhood Development

Scaffold at courtyard (photo)

Diversity
is already an important characteristic of the Eltingviertel district – it is crucial that this spirit and the district’s established structures remain preserved.

A good neighborhood environment should not be left to chance – especially if you have the opportunity to shape it. A good environment increases the appeal of apartments in the neighborhood, strengthens the sense of community spirit and minimizes social tension. As the landlord of larger contiguous settlements, Vonovia is making targeted investments in measures that benefit people living in its neighborhoods both directly and indirectly. But holistic neighborhood development needs the commitment of a whole number of different players. The Eltingviertel district project in Essen shows how these endeavors can be successful if municipalities, experts and housing companies pull together to achieve a common goal.

In terms of its location, the Eltingviertel district in Essen has everything that an attractive neighborhood needs: proximity to the city center, to nature, to the university. Attractive, traditional buildings with generous courtyards and outdoor areas. But many of the buildings are in need of renovation, many inhabitants only have limited financial resources at their disposal and the neighborhood is home to a high proportion of people with migrant backgrounds. Furthermore, the northern part of Essen, which is where the Eltingviertel district is located, is not exactly known for being one of the city’s best areas.

Substantial economic activity is needed to make fundamental changes to the neighborhood’s image and to allow it to unfold its full potential. Initiatives like this have certainly worked in comparable cases in the past – but often resulted in old tenants moving out.

This is precisely what is not to happen to the Eltingviertel district. The neighborhood is to retain its diverse character and remain affordable for the people living there. In order to make this happen, Vonovia, the Essen city authorities and experts from Innovation City Management GmbH came together in 2015 to inaugurate a project for holistic, sustainable neighborhood development. The objective is an ambitious one, but has the full backing of all of the parties involved. The aim is to secure the value of the properties, reduce CO2 emissions and boost the quality of life and sense of well-being of people living in the neighborhood. The structural and cultural character of the district is to remain intact. The planning period is five to ten years. The project kicked off in the spring of 2015.

Looking back: Vonovia provided the initial impetus for the process. We own around 1,000 apartments in the Eltingviertel district, or around 40% of the neighborhood. As real estate managers, we have to take a good look at our locations on a regular basis and ask ourselves how we want to support the apartments and our customers. This is exactly what we did with the Eltingviertel district two years ago. How can we protect the existing properties? Where do we have to invest? What are the characteristics that shape the environment and to what extent can we have a positive impact on them?

>1,000

Vonovia playgrounds across Germany

A healthy neighborhood is characterized by an atmosphere in which a unique way of life unfolds.

There was absolutely no doubt that action had to be taken, both in terms of energy efficiency, looking at the apartments themselves, and for social reasons, looking at the wider residential environment. In terms of its development history, the entire neighborhood had not changed much since the 1970s. The question we asked was: Why not look at the big picture and involve the other stakeholders as well?

This was no sooner said than done. We held talks with the city authorities and experts and then commissioned the expert team from Innovation City Management GmbH to conduct a large-scale exploratory study from a holistic neighborhood development perspective. The results – including recommendations for the energy-efficient renovation of our buildings and proposals for the further urban development of the entire district – formed the basis for this extensive joint project. We all met up to discuss our ideas, make any necessary adjustments and pass resolutions before ultimately getting down to work. The joint project was set out in a target agreement for the sustainable development of the neighborhood.

Roses infront a scaffold (photo)

>222,000

trees and groups of trees covering 415,000 square meters in our portfolio

In addition to the three initiators – the city of Essen, InnovationCity and us, Vonovia – the project enjoys the support of other institutions such as the utilities companies Emschergenossenschaft, STEAG Fernwärme and RWE. The people living in the area themselves – along with individual private owners, educational and social institutions, religious communities, associations, creative minds and committed individuals, as well as retail and commercial businesses – are encouraged to make their own contribution to the successful implementation of the project. They have been actively called upon to contribute to the process with their ideas and suggestions – for example on the design of outdoor areas and in matters relating to mobility.

Status quo: The first phase of the project focuses on Vonovia’s northern residential complexes: Electric thermal storage heaters are being replaced by “green” district heating, balconies are being added to buildings, windows are being replaced, basements and top story ceilings are being insulated, facades and stairwells are being renewed and entry hallways are being renovated. The outdoor areas are also being extensively planned and revised. When making all of these investments, the parties involved take care to ensure that the apartments will also remain affordable for tenants in the future. In order to ensure that this is the case, the federal state of North Rhine-Westphalia is also pumping public funds into the project. One third of the apartments, for example, are being renovated thanks to public-sector subsidies that contribute to ensuring affordable living space.

* “Green” district heating is generated using renewable energy sources such as biomass (wooden pellets) and biogas (biomethane) as opposed to fossil fuels.

Residential building at Eltingviertel (photo)

Vonovia has made a total investment volume of 29 million euros available for the Eltingviertel project.

While Vonovia is working on its existing properties, Essen’s authorities are currently taking a good look at how to design the district’s public areas, improve the transport situation and connect the Eltingviertel district to the neighboring ones. In addition to the renovation work, Vonovia will also be prioritizing the development of open spaces and courtyards to make them livable and lovable. In order to achieve this, a landscape architecture design competition was launched with the involvement of the city of Essen, policymakers and, of course, the tenants themselves. The open space concept is now to be implemented in 2016: Dark courtyard areas will make way for newly structured, inviting green spaces that invite residents to relax and play.

Together, we can achieve more. The Eltingviertel project is the best possible example of this. It is worth approaching others and joining forces to come up with a vision, complementing each other where it makes sense to do so and implementing the solution together.