The very low heating load of deep renovated buildings following standards such as EnerPHit, and the limited space in renovation create the need for compact heating systems. An innovative heating and ventilation system - consisting of an exhaust air to supply air heat pump combined with a heat recovery ventilation unit, both integrated into a prefabricated timber frame facade - was developed and installed in a flat during the renovation of a multi-family house in Ludwigsburg, Germany. The system and the flat were monitored for the complete heating season 2016/2017. This paper presents: (a) an analysis of the monitoring data, (b) the development and validation of the models of the system and the flat, and (c) the results of the dynamic simulations that were performed for further system optimisation. Inside the flat, good thermal comfort and indoor air quality conditions were achieved. The monitored SPF of the system was 2.8. Simulation results showed that with the optimised system and control, there can be an electricity savings of 25%. The developed system has the potential to be cost-effective due to prefabrication and low heating capacity. It represents a compact solution with moderate energy performance, appropriate for minimally disruptive renovations. (C) 2018 Elsevier B.V. All rights reserved.