Press release

Survey says landlords neglect utilities management

Hamburg (21 April 2015) More than three quarters of Germany's tenants (77 percent) criticise their landlords for neglecting the management of utility costs. They say that landlords don't do enough to reduce the 'second rent' - even though utility costs represent a significant financial burden for an increasing number of people. This was the result of a population-representative study by TAG Immobilien AG and the Technical University of Darmstadt. It involved a survey of 1,000 tenants in Germany.

The respondents see the biggest savings potential in areas such as electricity (71 percent), heating (66 percent) and water (62 percent), followed by waste management (46 percent) and caretaker services (40 percent). "There are enormous untapped potential savings in each of the individual items that constitute the second rent," says real estate expert Prof. Dirk Schiereck of TU Darmstadt. "But this potential can only be realised if home owners and tenants actively pull together to reduce utility costs."

The example of Salzgitter shows how much savings potential lies dormant in utilities costs. TAG Immobilien has practiced systematic cost management in its approximately 9,200 residential units since 2011. "We have optimised the costs of energy, waste disposal, cable TV, the internet and caretaker services for more than 15,000 tenants," says Claudia Hoyer, the TAG Executive Board member responsible for real estate management. For example, the electricity supply was re-tendered and environmentally friendly green power is now supplied to households from cogeneration plants. "This saves each tenant up to 275 euros a year in heating costs alone," says Hoyer.

TAG has also halved the cost of waste disposal in Salzgitter by changing the service provider, and a meticulous management of the waste disposal centres for household waste, bulky waste and waste paper. "We have been closely monitoring the number of dustbins in front of a given block of flats, how quickly they fill up, and whether it is possible to have them emptied only every other week," says Hoyer. A new concept of waste locks and usage-based billing, along with technically precise remote reading of electricity/gas/water, has additionally reduced costs. Overall, TAG was able to reduce costs for its tenants in the Lower Saxon city by up to 340 euros, or 20 percent of the total rent per flat per year.

"We also involve the tenants in our utility cost management," says Hoyer. For example, regular waste consultations were introduced, where tenants can ask questions about the topic of waste and also offer their own tips for savings.

"It's crucial that homeowners seek and find sustainable solutions," says the real estate expert Schiereck. This not only promotes the quality and attractiveness of the flats, but also reduces the second rent and, ultimately, vacancy. In Salzgitter, TAG has reduced its vacancy rate from 24 percent in 2011 to 15.5 percent in 2014. This represents a 35-percent reduction in vacancy.

About TAG Immobilien AG
TAG Immobilien AG an MDAX-listed company with a more than 125-year history. Its primary locations are in the Greater Hamburg and Berlin areas, the Salzgitter region, as well as Thuringia / Saxony and North Rhine-Westphalia. TAG currently manages about 74,000 dwellings and the associated commercial areas, garages and parking spaces. The company's goal is to improve the quality of housing for its tenants. In line with this, TAG adapts its holdings to modern living needs to, gets involved in the communities of its residential quarters, and promotes a good neighbourhood spirit. The Group continually reduces vacancy and increasing the value of its total portfolio through prudent management of its properties and a future-oriented/forward-looking development of its overall portfolio.

Press enquiries:
TAG Immobilien AG
Head of Investor & Public Relations
Dominique Mann
Phone +49 (0) 40 380 32 300
Fax +49 (0) 40 380 32 390
prtag-agcom