Home / ANALYSIS / Property management and FM need to work stronger together

Property management and FM need to work stronger together

by Nikhil Pereira on Oct 11, 2017

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Property management is one pf the most underrated tasks in the real estate sector. Over the last decade-and-a-half, however, property management (PM)  (or asset management) has developed alongside Dubai’s skyline, and with it, has come a level of professionalism. Legislation has helped the cause as the Real Estate Regulatory Authority (RERA) has enforced timely laws and directives.

Property management firms ensure the real estate space is managed on behalf of the landlord in their absence. It makes the function all the more critical given Dubai’s ratio of transient owners who chose to lease their real-estate space. Consulting firms such as Cushman & Wakefield, Macro and JLL have created a culture of involving facilities management (FM) companies from the construction phase making it easier for PMs to maintain the facility.

Gemini Property Developers — which has recently put its project in MBR City on sale — worked on appointing an FM company long before the building’s completion.

It’s chief executive officer Sailesh Jatania says: “We believe that preventive action is better than reactive, so our FM company will start working on site before the completion of the building.”

Gemini’s project — Splendor — is set for handover in January 2018. The developer is currently evaluating a host of FM companies, and expects a service provider to start operations by November 2017.

“During this time [before handover] the FM company will understand the MEP systems; they will also understand the electrical systems and automation system which will help in the transition from an incomplete building to a complete one,” Jatania says.

This will also smooth the process for the incoming property management firm that will be better placed to manage the asset on behalf of its investors.

Jatania explains: “The first six months following the FM company taking over is very crucial, and on several occasions we have noticed that operational teams are quite aimless. This can be solved by appointing an FM company prior to handover and occupation.”

An FM company is only as good as the property management firm or the owners’ association. As we have seen earlier in this issue (p16), maintenance of a building and its surroundings can only be carried out if the building management has enough funds in the kitty. This makes service charge collection pivotal, and the landlord’s cooperation is a must in this case. “We have factored in a sinking fund, which will address critical asset replacement. So that the property management firm can replace an asset — chillers, lifts and escalators — when its lifecycle is up. There should never be less than necessary funds to replace critical assets.”

Ensuring these critical assets function hassle-free for their stipulated lifecycle is just as important, and that is the onus of the FM company. Deyaar Property Management’s Ahmed Al Suwaidi says: “Choosing a facilities management provider from the onset is key. The building condition will have an effect on rental prices, ongoing property maintenance, and property demand. In addition to managing assets, facilities management companies also increase efficiency and maintain complete compliancy.” 

The Achilles heel of any building operations is its service fee collection, as a property management company will affirm. Cash collection becomes more challenging when owners aren’t based in the country.