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What functions does SAP Flexible Real Estate Management offer?

The need for dedicated and completely integrated real estate management software is more important than ever as the drive for urbanization and development sweeps the globe.

CIOs working at businesses with complex real-estate dealings may want to consider SAP Flexible Real Estate Management (RE-FX).

Real estate business scenarios can include buying, selling, leasing or renting land or buildings. SAP Flexible Real Estate Management, a component available in ERP Central Component (SAP ECC), is meant to make these easier to oversee and administer.

Let's look at some of the functions SAP Flexible Real Estate Management offers.

Master data management of real estate

The real estate master data in SAP Flexible Real Estate Management is able to capture extensive details about real estate, such as location, size, market value and usage of a given property for commercial, residential or recreational purposes. The master data offers a dual view -- an architectural view and a usage view.

The architectural view represents the actual architecture of real estate objects (that is, rental properties). For example, a floor of a shopping complex is an architectural view of a real estate object (the shopping mall) and doesn't change without remodeling or other changes. The usage view represents the use or the purpose of a specific real estate object and can change as often as needed. For example, if a shop in the mall closes, the renting company does not receive any payment until the shop is rented out again -- in other words, that space is getting no use.

The dual view of architecture and use means that the complete details of real estate objects such as a business entity, land, building or the rental properties  (master data in RE-FX) are all visible to a viewer.

The details of a rental object that can be maintained in RE-FX are pooled space (for example, shared office spaces), rental space (for example, part of the company's office rented out to another) and rental unit (for example, renting out an office to another company). It is also easy to maintain logical and functional links among the various master data objects of real estate in RE-FX.

Lease-in and lease-out

Lease-in and lease-out are specific functions in SAP Flexible Real Estate Management. A lease-in is a business process in which a real estate company leases land or other real estate from the landlord for a fixed but long period of time. It is an expense. It also entails paying out the landlord for the leased-in property on the agreed-upon payment terms. A lease-out is a process of leasing out the property to a customer for a fixed period of time and on agreed-upon payment terms. It is an income. RE-FX can cater to all the possible business scenarios of leasing-in and leasing-out and an overall cash flow situation showing leases' expenses incurred versus the income from leases earned.

Contract management

The contract management component of SAP Flexible Real Estate Management caters to the legal, accounting and statutory requirements to ensure complete compliance to local and national laws. A real estate company signs a contract with an owner to lease-in a property using a specific contract type. The property owner may eventually want to lease out the property to earn a fixed monthly rent (or any other rental payment's frequency). The leased-in property can be leased-out to customers using a different contract type. The option to make security deposits a part of any contract type is also available in contract management in RE-FX.

Space management

The ability to manage space not just from an architectural point of view but also for its usage ensures that real estate companies are able to maximize space to rent as effectively as possible. For example, in a shopping mall, it is quite possible to rent out open spaces that enable different companies to set up visual displays as well as set up kiosks for a limited time during the holiday seasons.

As with all components of SAP ECC, SAP Flexible Real Estate Management offers a large number of reporting tools and analytics. RE-FX needs to be activated first before a company can implement it. The former is as simple as switching on the RE-FX option, while the latter is a full project.

SAP Flexible Real Estate Management is also able to completely integrate with SAP Document Management System (DMS) to provide a central repository of documents arising out of RE-FX business processes such as contracts with landlords or customers.

This was last published in September 2018

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