How player in the real estate industry are affected by and respond to transformational processes - Empirical evidence from the German real estate industry by structural equation models

The real estate industry in general and its business models in particular are facing a transformational process, caused by fundamental and multidimensional changes in technology, economy and society. The approaching transformation process results from structural change, which is triggered by megatrends and various drivers of change. The changes in market environment and business models are going to be permanent, thus this process is of strategic importance for long-term decisions of all market participants in the real estate industry. Existing business models come under pressure to adapt, but at the same time changes offer a vast amount of development opportunities for all market players. Due to real estate participants reacting to this change, we speak of a transformational process.So far, no systematic research about how this transformation process is affecting the real estate industry has been done. Apparently, research has dealt with specific aspects but has failed to provide a comprehensive overview of this research domain. Therefore, our first research goal is to measure the diverse mechanisms of this transformation. Subsequently, our further research objective is to point out how business models of the various German real estate industry participants are affected and how they adapt to the pressure of structural change.Based on a systematic literature review, a theoretical framework has been developed. This framework is tested empirically by a quantitative survey of 249 decision makers in top management positions of German real estate industry. Structural equation modelling is used to show that megatrends have an indirect impact on corporate adjustments of the participants. The change processes triggered in this way, however, only translate into action through concrete drivers of structural change, that are relevant for this specific industry. Further investigations have been carried out on the market participants to figure out the relationships between the drivers of change and the adaption strategies. The results show that it is not just digitalisation that triggers the transformation. For many players, increase of efficiency in their traditional processes is their main focus, instead of evolving new business models or products and services.Only if the effects of the drivers of change and their consequential impacts on business models in the real estate industry are anticipated correctly, strategic management approaches dealing with future challenges and actively shaping the transformation processes, can be developed properly. The findings help to characterize the need for change in the real estate industry. Furthermore, the study reveals approaches for developing new and innovative business models.