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Property Management. Cost or Investment?
Prepared for Brigitte Schmitt Head Of Property Management, DTZ Echinox
Page 216.11.2010
Property Management Cost or Investment? Duties of the Property Manager
A Property Strategy
Property Management – a short update
Should I Manage My Own Property or Hire Someone to Do It for Me?
The Challanges: the Aftermaths of the Crisis
Outlook
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Successful Shopping Center
Opening
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Property Management – A Short Update Management that organizes all affairs connected with the property
business
Property is often the most valuable fixed asset of an organization
Trading in commercial real estate investment in the CEE region reached a record of EUR 1,7 million in H1 2010
In Property Management we are concerned not so much with the property as an investment but with it‘s use and administration
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Duties of Property Management Property Administration
Facilities Administration and Management
Budgetary and Expenditure Control
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Property Administration Long-term planning of requirements
Compiling and administration of records
Interfacing with landlords / agents
Interfacing with regulatory bodies
Ensuring compliance with covenants under leases
Liaise with tenants
Interfacing with insurers
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Property Administration Administration of cleaning, security, safety, reception, waste
disposal, gardening etc.
Interfacing with utility and other service providers
Preparing and updating contingency and/or disaster recovery plans
Interfacing with local authorities, neighbours, trespassers
Assisting, planning of relocation of tenants
Overseeing the renegotiation of leases, rent reviews, renewals
and so on – and so on...
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Budgetary and Expenditure Control Apparent „cost blindness“ to property expenditure
Facility costs are regarded as fixed and immutable
Invoices passed for payment without further investigation
In Companies:
often duties regarding property assets are allocated to a manager already commited to his or her „real job“
no proper administration at all
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Budgetary and Expenditure ControlDTZ Debenham Thorpe discoverd in an investigation:
only 20% of those surveyed had a comprehensive database concerning the properties they ocupied
and
10% had such incomplete database that not even addresses and details of tenure were recorded centrally
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A Property StrategyProperty can be:
improved, altered, have its use changed…
Requires regular investment –
to comply with legal obligations
to maximize its value and protect the investment
Imposes responsabilities, obligations and liabilities.
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Should I Manage My Own Property or Hire Someone to Do It for Me?
„Out of State, Out of Mind“
If you do not know the property market in the area
Your tenants schedule is your schedule
Know All the Maintenance Issues
Know All legal requirements
Size Does Not Matter !
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Challanges: The Aftermaths of the Crisis
„Cost Savings“
Due to a lot of savings – there is a backlog of maintenance issues.
Necessary investments have not been done so far.
Training of staff has been delayed or not done at all.
Projects stopped.
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Outlook
New Market Requirements:
Companies who know the business
Investors, banks, owners attach more importance to good
Property Management
The best attract the best
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Thank you for your attention!
