Refurbishing the property management sector
The property market boom that saw prices go above the roofs in the UAE, has shown a downturn in recent years. While this has made renters happier, it has put property managers in a state of flux. With more units popping up across the city, developers giving extraordinarily flexible payment plans directly to the consumer, and prices of rent and purchase slashing, it is clearly the buyer’s, or renter’s market today. Many smaller property managers have shut shop, and those still in the game face challenges to keep afloat. However, there are many who are still doing relatively well. So what’s their secret? In one word: innovation.
For every industry, the market changes with time; bringing fresh hurdles for businesses to deal with in order to keep thriving. Recently, it is the changing population demographic, tough economic climate and digitisation reducing the need for middlemen. The solution for businesses, especially for property managers is not unusual, they simply need to innovate in their business model to better cater to the market.
In May 2018 Sameer Lakhani, Managing Director at Global Capital Partners, commented on the potential of blockchain transforming the property landscape, saying “The Land Department platform could create a fully transparent ledgering system — based on blockchain — for all property/land deals conducted in Dubai. Whenever there’s more transparency entering a system, the pressure will be felt the most by brokers.” He added, “Middleman commissions across industries in the last three decades have experienced pressure on their margins, and this move by the Dubai real estate authorities is headed in that direction.”
With UAE’s Vision 2021 having a strong focus on technological advancement, this move comes as no surprise. Moreover, as per the statement released by the authorities in the first half of 2018, landlords will be able to pay utility bills remotely via the platform, which goes to say that there wouldn’t be a need for personal property managers or service agents. So it’s time they level up their game and innovate the services they offer to stay ahead of the curve; because while their brokerage aspects may not be needed, their experience, knowledge of the market and value of innovative services provided to increase revenue is what can make them sought after.
When it comes to managing commercial properties, Fadi Nwilati, CEO of Kaizen Asset Management Services, advises,”To be a top commercial office building in today’s world, it takes more than some vending machines and a gym. Tenants want more, frequently a one-stop destination for things like food, fitness, and wellness. The spaces of today need to cater beyond the essential amenities it needs to offer a lifestyle. It's about a total transition of common areas; adding cafés, supermarkets and event areas can genuinely transform the property experience. Property investors need to see adaptive reuse as net operating income and growing the property yield. Landlords can promote unoccupied retail and commercial spaces by keeping it active through short-term leases, pop-up stores, and co-working spaces.”
Commercial or residential, different property types need unique approaches. The key is to listen to the consumers’ and landlords’ woes and try to address their pain points. Understand the place, its location, the people it is designed for, the ones using it, and the hurdles you face to innovate what you offer your clients. Following are some tips to help you get started:
1. Add value to the property: This allows you to increase rentals and charge additional fees for specialised services. For example, including restaurants, farmer’s market, insurance, quality coffee machines or baristas can make a space more attractive.
2. Offer services: This goes a long way in Increasing the value of your company. For example, if you offer to do background checks, provide 24-hour maintenance hotline, hire security guards to look after the properties, etc. it makes a stronger case for the landlords to choose your services above the others.
3. Maintain properties: Retain and enhance the value of properties by keeping them in good shape. This not only reduces the costs of upkeep and repair, but also helps protect the landlord’s investment; and in the long run, it can help you build profitable relationships with them to get continued business. Moreover, keeping their properties in good condition reduces tenant maintenance calls, leading to renewed contracts year after year, giving you and the landlord the desired stability.
4. Hire well: This might seem like an odd one, but having your staff work with the right attitude towards your clients is crucial to maintain good relationships and keep people happy. It’s not just about targets and figures, but the intangible happiness quotient of the people involved that leads to repeat business and referrals that help you grow.
What brokers and property managers need to realise is that there is a difference between being a good property manager and running a successful property management company. When you’re managing people, you need to focus on them, the hurdles they are facing in doing their jobs, focus on developing your business to ride the changing times, and encourage your employees to suggest ideas, proactively innovate in how they deal with clients and situations, and work in line with your values and goals.
In 2018 we saw parking spaces becoming chargeable in Jumeirah Lakes Towers and more cafeterias and restaurants doubling up as co-working spaces. Will your company introduce an innovative way to increase revenues this year? We’re excited to see how the property management services evolve to better serve landlords and renters and increase their value in the market.