Props to tech
Property technology and cloud-based innovations have the ability to streamline property management processes and improve the industry for all parties, writes JANA HOOD.
Commercial property management is undergoing a transformation as external service providers and in-house professionals look for new ways to add – and quantify – their value to clients. This is a smart move as a positive customer experience provides a stronger barrier against competitors. It also aligns with trends within the facilities management sector to focus on improving the well-being and performance of people within a building as much as the structure itself.
Data is integral to understanding and managing the thousands of business processes that underpin the operations of even a medium-sized commercial building, including rent reviews, lease expiries, scheduled maintenance, health and safety compliance and property inspections.
The more accurate and timely the data, the greater chance a manager has of shifting from the proverbial fire-fighting to proactively anticipating the needs of tenants and landlords. The need to efficiently manage information is accentuated in high-traffic public spaces, which experience more frequent maintenance, meaning that records are constantly changing.
Property and technology
While attempts to introduce automation to commercial property management are not new, many efforts fail due to their high capital cost not delivering the expected return or proprietary systems that create information silos.
In contrast, the benefits of cloud-based systems lie in the ability for technologies to cost-effectively integrate with one another, working to digitise relationships between the owner, the tenants and service providers.
Property technology, also known as ‘PropTech’, is an emerging technology category that lies at the heart of the relationship between landlord and tenant. Combined with a mobile device, it offers industry professionals tools to help scale their teams and focus on greater value-add activities.
A common complaint from the professionals responsible for managing multimillion-dollar building assets and overseeing multiple contractors is the time devoted to administration and related issues such as invoicing – tasks that are necessary, but don’t feel like a productive use of time.
PropTech offers more efficient ways to manage these business processes in an increasingly regulated and cost-conscious environment. Clients report something like 75 percent savings in administration time when moving to the cloud.
Technology’s potential to enhance productivity is shown in Macquarie Bank’s latest Commercial Real Estate Benchmarking Report, which identifies a group of high performing commercial real estate businesses. Their productivity is illustrated by substantially higher leasing rates compared to their peers – the high-performing businesses average 88 new tenant transactions (versus 62 for all businesses) and 91 renewals. Property managers in these companies have 123 tenancies on average, compared to 102 for managers in all businesses. Interestingly, these businesses are also characterised by a high level of confidence in their ability to adapt to change.
A recurring theme throughout Macquarie’s research is that real estate businesses should automate administrative tasks, to streamline, remove duplication and create more value-added services. Top performing agencies realise it’s not about cutting costs by reducing staff, but instead it’s about retaining quality staff and better utilising their time on activities that increase revenue.
Steven Marinucci, national head of commercial real estate and state segment head (Queensland) for Macquarie Business Banking, says it’s about trying to change the mindset of commercial property managers.
“Consumers spend five and half hours a day on their mobile devices, so it’s about how you adopt to new tech by being mobile and ensuring the client experience is fantastic. And, if it is, the clients are willing to pay a premium for a service,” he says.
The tangible impact of cloud-based systems on industry professionals is brought home when speaking to clients. A commercial property manager from Victoria describes how creating a hub for every business document replaced disparate storage systems, which included lease documents on the server, invoices awaiting payment in emails and paper files in the filing cabinet. Information is now in one place, is easy to understand and available to share on a tablet during a meeting, allowing time with clients to be spent strategically rather than attempting to recreate their lease or maintenance history.
Another facility manager client tells of the difference made to the customer experience when replacing a spreadsheet-based operation with cloud-based systems to quickly on-board new tenants. Because a manual process requires more people, the room for errors increases, whether it’s data entry errors or missing key dates, such as lease-end. Instead, dashboard-based calendars and planners on mobile provide timely prompts for important actions.
Facilities management is the engine room of any commercial property, ensuring building operations and maintenance run smoothly and largely ‘under the radar’ of tenants and visitors. To extend the analogy, PropTech is the oil that can reduce the friction of many business processes, especially those related to maintenance and budgets. Because these services are often visible to tenants, businesses gain the dual benefit of improving their customer experience as well as internal productivity.
Jana Hood is the managing director Australia and New Zealand at Re-Leased.com, a cloud-based commercial property management company. To download the 2018 Commercial Real Estate Benchmarking Report, go to www.macquarie.com/au/business-banking/campaigns/commercial-real-estate.
This article was originally published in the Dec/Jan 2019 issue of FM.
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