By Victor Adar
Property and facilities management are not new terms in the real estate space, yet not many individuals understand them. The two are, in fact, not the same thing as is commonly the misconception. While property management relates to the management of the physical building in terms of maintenance and even the tenancy to some extent on behalf of the owners, facilities management on the other hand focuses on people and services with a bias on areas like fire safety, heating, ventilation, and air conditioning (popular as HVAC), and waste management.
Essentially, as an investor or property owner, you would want to ensure that everything will be taken care of when you contract and entrust a competent team with the management of your property as a way of protecting the value of the asset. This is what birthed Evermark Ltd, a company that caters to all facets of managing property investment including maintenance, marketing, tenant management, legal safeguarding, statutory compliance and financial reporting. The firm’s portfolio includes clients in private residential, planned developments, warehousing, and commercial real estate. Director of the Nairobi-based firm Renu Hunjan explains.
What does property and facilities management entail?
In Kenya, most property managers will likely combine the two within their role, but with bigger buildings like apartments, commercial offices, and institutions its far more complex as there is a need for more efficiency for asset management, use of space, processes and systems requiring more technical and specialized teams and schedules. Facilities management is a completely independent approach to property management. Both are necessary to maintain the overall profitability of the building for the owner and its efficiency for occupants, visitors.
Why would someone need property and facilities management? Who are the biggest beneficiaries of the service?
Anyone who has invested in property would of course benefit from the efficient daily oversight of their property, whether it’s residential, commercial, or industrial. Investors who are looking to diversify their asset portfolio in the property will contract a property manager to handle the day-to-day running so they can focus elsewhere. They may not have the time to run around and attend to problems on the ground. The opportunity cost alone is a big reason why the most successful investors delegate to experienced property managers.
Property developers would generally want to move on to the next project as soon as one is completed, so even as they continue to hold the title deed to the property, they prefer to delegate the day-to-day operations to an outside company. The property managers contracted to handle this day-to-day running also support the homeowners who will have purchased the property from the developer. This could be any type of property – apartments, townhouses, vacation rentals, multi-family homes, offices, retail spaces, co-working spaces, heavy and light industrial warehouses and distribution centers, schools, hospitals, theaters, senior care facilities and so on.
Well-managed buildings will appreciate better in value over time as a direct result of maintaining, improving the building structure and its efficiency, as tenants tend to be attracted to buildings that are run smoothly. Selling a well-maintained property is certainly a lot easier than pushing for one that may come at a cost to the buyer/seller.
Working with a single point of contact for all service providers with the added benefit of better rates for services is one main reason experienced property owners prefer to work with property managers. As long as you have a property and facilities management team that knows how to deliver value, it most certainly will benefit the stakeholders.
How is the uptake of this service? Are Kenyans open to it? Do they have reservations about the service? If they do, how would you address these concerns?
We find that most Kenyans start off by managing their house, apartment or warehouse themselves. Until one day when there is a need to better screen tenants, tactfully address problems with rent collection or even find vetted repair and maintenance teams or they simply have no time. Then they will get help.
Even then, there is the problem of most ‘freelance’ or ‘suitcase’ managers in Kenya not having been trained on how to manage a property seeing as a majority are not registered with a regulatory body.
For those who value peace of mind over the years, we see a strong sense of seeking out information, looking for good property managers based on the kind of properties they manage, doing their due diligence on how the buildings are actually being run, asking for references, requesting for financial and technical proposals and so on.
Our own experience spans property development, investment as well as professional property and facilities management which gives us a unique vantage into foreseeable problems with tried and tested solutions for each type of property.
What is the space/role of property and facilities management in the success of a real estate project?
Absolutely critical seeing as the success of a real estate project comes down to sales takeoff and/or tenant retention depending on the specific sale or rent model. Both of these are going to be unlikely if the property is not well managed or if the occupants/tenants don’t see value in the way services are being provided.
Nowadays, property management and facilities management (FM) are both important for real estate planning when considering the operational efficiency and cost management of a building. Managing water and power consumption using data from FM software for example, helps companies see how their investment is taking shape and how it impacts the broader operations of the business. This helps investors look beyond the building and what it takes to sustain workforce productivity towards long term success.
How is the industry evolving? Are we likely to see more investors in the real estate sector seek these services?
Investors, property developers are seeing property and facilities management as an essential part of the real estate industry as it helps them reduce costs, improve efficiency, increase revenue and grow client/tenant satisfaction. And savvy investors are experienced enough to know what it takes five or even 10 years into the future to see strong capital appreciation, so high quality services will continue to be sought out.
Did Covid-19 have an effect on the real estate industry? Did the industry suffer and is it recovering?
Real estate as a sector was greatly impacted by Covid and while some areas like offices were restricted and had low occupancy, private residences like apartments and homes needed more attention. Working from home meant people expected better, faster service. So it was a very challenging time in some ways across the value chain.
We now see a strong upward trend with offices gaining good occupancy levels or some adopting a hybrid workstyle and planning spaces differently. For a lot of investors and property stakeholders it became clear how critical property and facility managers are in planning for risks, continuity and general welfare.
What is the difference between handling a commercial vis a vis a residential property/facility?
The two are very different in terms of occupancy and operations – commercial properties will have businesses and organizations as tenants whereas residential would have individuals or families. Commercial leases are typically five years or more while residential may be monthly or annual. Legislations are different as well.
The kind of skill set it takes to manage an individual and residential issues like repair, maintenance will be different from managing lift maintenance schedules for a 5 storey commercial building, or proper waste management from a manufacturing facility. One may require more on-site management than the other.
