Annual Report 2020

Vonovia Innovation Platform

In addition to the demands already created by the social megatrends, the current impact of the coronavirus pandemic has raised additional questions regarding the future viability, sustainability and durability of business models. This is also closely linked to the fact that today’s stakeholders are more diverse and to what they expect of companies as good corporate citizens.

This makes it all the more pressing to review and revamp business models with a view to their future viability and acceptance. As the leading housing and development company in Germany, Austria and Sweden, Vonovia sees itself as a driving force for renewal. The new strategy developed in the summer of 2020 explicitly addresses the future viability, sustainability, durability and ultimately, as a result, the acceptance of the business model.

Innovation at Vonovia focuses on the following areas for action: climate and the environment, neighborhoods and society and, of course, customers and processes. This comes hand-in-hand with the ongoing evaluation of entrepreneurial decisions in terms of their impact on the sustainability and future viability of the business model (outside-in perspective) and their implications for the environment, climate and society (inside-out perspective). Neighborhoods are the focal point for the implementation of innovation measures at Vonovia. It is not only neighborhoods in the existing portfolio that are put under the microscope. In development projects, a firmly established neighborhood concept is taken into account right from the design phase. The large number of neigborhoods that Vonovia has is a USP of the company and the ideal platform for rising to the challenges posed by megatrends and issues of tomorrow. Vonovia has the innovative capacity needed to respond to these challenges.

Environment and Climate

Innovation is a must if we want to achieve our strategic objective of a climate-neutral housing stock. As the building shell renovation measures and the replacement of conventional heating systems that have proven effective to date will not be sufficient to allow us to achieve our ambitious climate protection objectives, the focus has to be on using more renewable energies and on corresponding neighborhood systems. In the interests of achieving a holistic supply concept, we will also need to take electricity into the equation in the future. The energy revolution will be shaped by decentralized generation and local consumption.

The efficiency potential that a neighborhood offers as well as the degree of self-sufficiency that it can achieve can be increased significantly by creating a targeted network of electricity, heat and transport. As a result, future neighborhood development projects will pursue the approach of generating green electricity and green heating in the neighborhood itself and consuming it again at a later date as and when required. The energy concept is supported by infrastructure for sustainable mobility solutions.

The climate path that Vonovia has mapped out therefore includes, in addition to an increase in the refurbishment rate and the replacement of conventional heating systems with state-of-the-art heating systems using renewable energy, switching to district heating and cogeneration units, sector coupling and stepping up the use of renewable energies (fuel switch). In the long run, the aim of neighborhood systems is to achieve as high a degree of self-sufficiency in energy supplies as possible. Fuel cell technology, the sort of technology that is being tested in our Bochum-Weitmar innovation lab neighborhood, is another potential candidate in this regard.

Energy-efficient Neighborhood Development

Energy-efficient Neighborhood Development (Graphic)

The Bochum-Weitmar Neighborhood as an Innovation Lab for the Housing Industry

In Bochum-Weitmar, Vonovia established the first energy research center for its portfolio with the Powerhouse of the Future. More than half of the heat required and up to one quarter of the electricity required is being generated on location using innovative technologies (e.g., electrolyzer, fuel cell, hydrogen storage facility). The research aims to identify scalable, ecological business models and technology combinations for our some 600 neighborhoods.

Decentralized energy supply thanks to the use of renewable energies, sector coupling, the right energy mix and, last but not least, energy storage are the main areas of development being used to identify economical and ecological technologies, the aim being to slash CO2 emissions dramatically. As a result, the research laboratory is focusing on the practical use of innovative technologies, the aim being to test and enhance the interaction between various different energy systems.

Technologies such as solar and geothermal energy as well as methanization are to be researched with a view to sustainability and practical approaches. Electricity from solar power that is not required when it is generated is converted into hydrogen using an electrolyzer so that it can be stored and converted back into electricity and heat at any time.

Customers and Processes

The Innovation & Business Building (I&BB) department is Vonovia’s central innovation unit for developing new, customer-centric products and services that take the relevant megatrends into account. I&BB focuses in particular on the global megatrends that are also significantly affecting the housing industry. Inspired by the process of technological change, these products and services have the potential to satisfy customer needs in the long term. The main topics addressed are:

  • Customer satisfaction and service quality
  • Expanding the range of products and services
  • Digital transformation.

The following key tasks have been defined as the department’s remit:

  • Identifying relevant market trends and customer needs as well as collecting ideas across various departments
  • Developing new ideas, e.g., using trend and start-up scouting
  • Iterative development of new fields of business
  • Managing the innovation process and further developing new ideas until they are ready to go into production.

Innovations go through six stages and five decision gates before they are rolled out. I&BB uses agile project structures and digital collaboration tools that involve the individual departments as part of this process.

  • Generating and validating ideas (e.g., design thinking)
  • Customer-centric product development (e.g., rapid prototyping).

Innovation Funnel

Innovation Funnel (Graphic)

Neighborhoods and Society

Definition: “A neighborhood has a visually coherent urban development structure, it is seen by its residents as a distinct area and represents an area for action in which the residential real estate company can make a difference and see positive effects. It comprises at least 150 apartments. A large housing estate can, in itself, also describe a neighborhood.” (German Association of German Housing and Real Estate Companies (GdW))

Environmentally friendly urban redevelopment is a complex challenge and calls for sophisticated solution strategies. In order to implement its climate strategy, Vonovia seeks to achieve engagement on the part of other owners, residents, municipal policymakers and administrative bodies, local utility companies and other social organizations. Focusing on neighborhoods and looking at them as part of holistic concepts has the potential to promote business area development and create added value for tenants. One positive aspect for Vonovia in this respect is that policymakers, too, have recognized just how important neighborhoods are for the energy revolution.

Vonovia has developed the innovative B2Q (Business to Quartier [the German word for neighborhood]) perspective within this context. In order to develop this perspective even further, Vonovia has also developed plans for the further development and expansion of its Neighborhood Academy. Thinking in terms of the neighborhood is at the forefront of all of the measures we take.

The program offered by the Academy in cooperation with the EBZ Business School in Bochum includes modules covering practical case studies and the following training content:

  • Megatrends
  • People & housing concepts,
  • Cost-effectiveness
  • Technical solutions
  • Communication and participation.