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Property management and FM need to work stronger together

Property management firms ensure real estate space is managed on behalf of the owner, making the function all the more important in the interest of sustaining a property – and the overall building – in the long run

ANALYSIS, Facilities Management

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.

Deyaar launched its own FM company in late 2016 — Deyaar Facilities Management (DFM). Its general manager Eng. Mohammed AbdulKarim Khamis said in a 2016 interview with fmME that the market still misinterprets the scope of FM services to cleaning or minor maintenance works.

This results in challenges to outsource FM. Small-scale PM firms tend to have a medium-size team of technicians and cleaners, but the market widely looks at outsourcing FM works to a specialised operator, often one that can offer high quality total facilities management (TFM) services. 

Chestertons head of property and facilities management Ellen Sleutjes says: “Once we are confident all required documentation is in place we take a closer look at the companies’ experience, the number of years they have been operating in the area, what projects the company is currently working on and what they have achieved in the past. Furthermore, we make sure to find out whether they provide skilled and experienced employees, with required training and certificates in place.”

Jatania adds: “There are many service providers who specialise in one discipline — MEP or security services — but we look for a service provider that provides integrated FM services. Today, FM companies that offer MEP, security, cleaning, concierge and cost management are in demand raining the overall standard of FM delivery in country.”

Speaking about challenges, Sleutjes adds that varying weather conditions can make maintenance quite challenging. “The harsh climate and extreme heat in the UAE means most maintenance issues appear during the hot summer months. Issues surrounding HVAC, for example, can be a daily occurrence. It is, hence, of utmost importance that properties are maintained and regular services are attended to, ensuring the safety of the property (and its residents) and the efficiency and durability of parts and systems that operate within. 

“It can be challenging at times to educate landlords on the importance of maintaining their property, however more and more landlords understand the necessity of preventive maintenance and are realising that prevention outweighs the cost of any future damage repairs,” she adds.

RERA and Dubai Land Department have introduced legislation and laws that ultimately ensure a smooth tenant-landlord relationship, along with better maintenance of the building.

“Any legislative changes being made that benefit the industry and create more security, greater understanding and more refined processes can only be positive for the consumer, investor and of course real estate agents,” Sleutjes says.

She adds: “Whilst most changes have been reasonably easy to implement, in our experience, some of the changes might have been a little more difficult to accept by clients. Capping rental increases was not necessarily initially popular with landlords, however it was definitely a step in the right direction for tenants. The registration of lease contracts to Ejari was a positive change for all parties as was the broker registration. These are just examples among many others.

“The improvement in transparency has created renewed confidence within the real estate industry, with plans afoot to propagate this further,” she says. 

In a comment made by Abdulla Al Gurg — general manager, Easa Saleh Al Gurg — on constructionweekonline.com, he points out that “maintenance is the most important factor in attracting investors. Having high-quality and well-kept property that is safe and secure is crucial to the retention of tenants, and also to the creation of positive reputation within the market.” 

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Construction Week - Issue 741
May 11, 2019