SAP RE-FX (Flexible Real Estate Management) is SAP's solution for managing real estate and lease contracts. It holds the real estate the company owns, leases in or leases out, together with the related contracts, in SAP, and manages rent accruals, payments, rent increases and accounting entries in integration with SAP FI and CO.
One of the main topics bringing RE-FX onto the agenda today is IFRS 16. In a properly configured RE-FX/Contract and Lease Management setup, the IFRS 16 valuations of the lease liability and the right-of-use asset can be calculated from contract data. This calculation is not automatically available in every RE-FX implementation; it requires Contract and Lease Management valuation configuration, accounting principles and the relevant licence and scope.
The SAP Real Estate Management solution creates value for the retail, shopping centre, banking and real estate investment trust (REIT) sectors and enables the real estate life cycle to be managed end to end. With this solution, lease contracts, rent escalation rates, ownership structure, maintenance and repair, and construction processes can be managed from a single centre, fully integrated with SAP modules.
RE-FX models a real estate portfolio on two layers: the property itself and the contracts relating to it.
Contracts are integrated with SAP FI and CO: depending on configuration, periodic rent postings flow automatically to accounting and to the relevant cost centre or profit centre. Maintenance and repair and construction processes can be linked to SAP's maintenance and project modules.
Starting from branch establishment investment, project planning, cost and schedule tracking, the tracking of branch, ATM and office lease agreements, space management, rent escalation and payment processes can all be handled from one centre. Management reporting can also be set up with SAP Analytics Cloud or existing BI tools; this depends on integration and licence conditions.
Since 1 January 2019, IFRS 16 (TFRS 16 in Türkiye) has required lessees to recognise lease contracts on the balance sheet, apart from exemptions such as short-term and low-value leases. For companies with hundreds or thousands of contracts, this turns lease tracking into a regular accounting calculation process.
In SAP RE-FX, this process is built on contract data:
IFRS 16 compliance therefore depends directly on the accuracy of contract data: if contracts are held in a scattered or incomplete way, the result will not be reliable, however automated the calculation is. Where the rent expense in the statutory books under the Tax Procedure Law (VUK) and the IFRS 16 entries need to be tracked side by side, this distinction is resolved within the same structure through the design of ledgers and valuation areas.
At one of Türkiye's leading telecommunications companies, Montag moved around 50,000 lease contracts to SAP Real Estate Management. At the end of a six-month first phase, contracts spread across different locations, facilities and operational sites were being managed centrally in a single system, together with their contract conditions and related processes.
In the second phase, the same infrastructure was extended to meet IFRS 16 requirements. Holding the contracts in SAP in a structured, central way laid the foundation for running IFRS 16 postings and reporting from the same data source.
This example shows the right sequence for high-volume portfolios: first move contract data into a single, reliable structure, then build the accounting standard's calculations on top of that structure. For details of the project, see the 50,000 lease contracts case study.
In RE-FX projects, most of the time goes not on system configuration but on understanding the contract portfolio and preparing the data. Clarifying the following points at the outset speeds up the project:
The answers to these questions determine whether RE-FX becomes merely a contract archive or a reliable decision-making tool for finance and management.
Montag designs central, SAP-based structures for managing real estate, lease contracts and right-of-use assets that fit companies' operational and financial needs. Contract, payment, indexation and reporting processes are brought together in a single system; the lease liability, right-of-use, depreciation and interest processes under IFRS 16 are part of this structure. For details of the scope, see our real estate and IFRS 16 services.
Organisations that want to track lease liabilities and contract maturities alongside other financial indicators on a single screen for senior management can look at the CFO Reporting Cockpit package.
If you would like to discuss your current contract portfolio, your IFRS 16 process or the real estate scope of your S/4HANA migration, you can reach us through the form on the contact page.
SAP RE-FX (Flexible Real Estate Management) is SAP's solution for managing real estate and lease contracts. It manages the real estate the company owns, leases in or leases out and the related contracts; when properly configured, it produces rent accruals, payments, increases and accounting entries in integration with SAP FI and CO.
Yes, but this requires the relevant Contract and Lease Management (CLM) and valuation functions to be configured. For contracts signed as a lessee, the lease liability and the right-of-use asset are calculated and posted according to the valuation rules; the amount of the right-of-use asset is not limited to the present value of the lease payments. Interest, depreciation and remeasurement entries for changes are generated periodically. The reliability of the result depends on the accuracy of the contract data.
RE-FX integrates with SAP FI for accounting entries, with SAP CO for cost centre and profit centre reporting, and with asset accounting for right-of-use assets. Maintenance and repair and construction processes can be linked to SAP's maintenance and project modules. The scope of the integration depends on the system architecture and configuration.
In tenant contracts, the company pays rent; payments and IFRS 16 calculations for the premises it leases, such as branches, stores, offices or warehouses, come to the fore. In landlord contracts, the company collects rent; invoicing, service charge and turnover rent processes matter in shopping centre, housing and office portfolios. IFRS 16 sets out different accounting rules for the lessor than for the lessee, so the accounting design for the two roles is handled separately. RE-FX can manage both roles in the same system.
Yes, but the answer depends on the edition. In S/4HANA on-premise and Private Edition, the supported solution for real estate management is RE-FX; the old classic RE solution is not supported in S/4HANA. In S/4HANA Cloud Public Edition, the Contract and Lease Management scope is used; the differences between editions and scope items should be assessed separately. Companies planning an S/4HANA migration are therefore advised to include the real estate scope in the migration roadmap from the outset.