Property Management Services Becoming Popular

Published: September 5, 2009 at 11:03 AM | Author: Administrator
News Source: September 4, 2009 - Indian Realty News

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Property management services are fast catching up, with a host of companies lining up to offer their services to high net worth individuals and real estate companies. Among those vying for a pie of the sky are Sahara Care, Neat Space, TTK Enterprises, Settlers India and Sai Associates, to name just a few. What makes these services so special is the convenience they provide to owners, in so as they do not need to personally supervise and maintain their real estate assets. The spectrum of services provided is impressive: housekeeping, both manually and mechanised, tenant management or finding a suitable tenant, collection of rent, negotiating rent agreements with changes in market prices, other legal and maintenance requirements.

“The primary benefit is that property asset management (PAM) allows for better expense planning as far as maintenance of a property is concerned. This maximises the asset value, since a better-managed property fetches a higher price than one that is not — both in occupier rentals and in outright sale of the asset,” said Ashutosh Beri, managing director, property and asset management, West Asia, Jones Lang LaSalle Meghraj (JLLM). JLLM has more than 1.2 billion sq ft of property and corporate real estate assets under management that includes clients in the real estate space such as Hiranandani, RMZ and Unitech. “Since the economy is reviving we are witnessing that many clients are willing to avail these services,” Ashutosh said.

At the moment though, markets for such services are localised and cluttered with small companies and real estate brokers, Amit Mookim, director, strategic & commercial intelligence, KPMG said. “Profess ionalism of service is still in its nascent stages, but there is a good future for property management in India, which being a developing economy has witnessed dynamic appreciation in real estate prices, making investment in real estate a risky albiet profitable venture over the long term,” he said. “It has become imperative for owners to ensure that their assets are managed holistically so as to optimise expenses and ensure greater value for users and investors of such assets,” explains Sushant Mutreja head, property and asset management, Sahara Care.

The charges for these services differ from company to company and also on the size of the property of the clients. Some company charges between Rs 2.50 to Rs 4 per sq ft while another one takes a commission of between six to 10 per cent on the annual rental value of the residential properties. Simit Thakur, chief executive officer, Neat Space Property and Asset Management Services, which handles more than 30 clients with an asset base of 10 billion square feet, said that her clientele has a majority of corporate houses and HNIs or people with net financial assets of at least $1 million. These people build vacation houses on the outskirts of their city of residence or far off tourist cities in India,” she said.

She said the clients view these properties as investment as well as a vacation home for a few weeks in the year. “For the rest of the year they put it up on rent, the task of which can be assigned to a property manager in the local market. The property owner has to provide a notice of two to three months mentioned in the agreement, when they want to come back,” Thakur said. “NRIs from countries such as Australia, UK, also form a large chunk of the customer base for our services. Living abroad they do not have everyday control on their property, the management of which are outsourced,” Thakur added.