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How property mgmt is coming of age in India

When Jones Lang LaSalle India first launched property and asset management services in India in 2003, the number of residential and commercial complexes being managed by an international property consultancy was minimal. The perception back then was that such professional services are too expensive.

With time, this perception changed and developers began opting for such services by International Property Consultants (IPCs), learning to see them as more than just manpower vendors and accepting property management as a specialized and cost-saving service. This change in mind-set is very evident by the increasing number of housing societies that are now opting for professional property management services by IPCs.

Today, the market for professional property management by IPCs in India is valued at around Rs. 1000 crores, and it will grow by at least 20% annually. The maximum demand for these services is in the NCR region, which has seen a massive supply of projects and has an equally staggering number of projects in the pipeline. The second-highest demand comes from the South, primarily Bangalore and Chennai. In Mumbai, these services are preferred more for the commercial office buildings and high-end residential societies.

Making a decisive difference

Usually, limited integrated service providers venture into managing of residential condominiums and ensure that the RWA (Resident Welfare Organization) nominates members for responsibilities of maintaining and employing security, housekeeping directly to reduce the cost. This is a redundant model. Companies like Jones Lang LaSalle have core expertise to manage these services, across local geographies with international synergies for best practices.

In other words, IPCs specialized in property management provide a one-stop solution and additionally support in various technical aspects to professionally and cautiously manage safety, security, cleanliness, etc., and maintain very strict adherence to statutory requirements. This ensures both tangible and intangible benefits.

For residential property management to become feasible for both the client and the agency, the total saleable area of the project would be around 300,000 sq. ft for a mid-level housing society.

The general list of services includes the following:

- Electro-Mechanical (E&M) Services

- Housekeeping Services

- Security Services

- Club-house Management

- Events Promotions Management

- Promotion Displays / Space On Hire

- Help-desk / Concierge Services

- Hardscape / Landscape Management

- Garbage Management

- Events and Promotions Management

- Vendor Management

- Annual Maintenance Contract (AMC) Management

In the case of cities like Mumbai, there is demand for an enhanced services which includes additional aspects such club house management.

Residents' responsibilities

Though professional property management in residential complexes encompasses a multitude of functions and services geared towards providing a comfortable and hassle-free experience for tenants, there is a certain onus of responsibility on the tenants as well. Without such cooperation, the smooth functioning of the project is bound to be compromised sooner or later.

To encourage this participation, two sets of guidelines are handed over to tenants. The first is the fit-out guidelines list, which highlights the do’s and don’ts that residents need to adhere to while undertaking fit-outs in their apartments. The basis of these guidelines is to avoid structural damage to the building. These guidelines also include a set of instructions pertaining to how to bring materials into their flats without causing disturbance to other residents.

The other set of guidelines is an Occupant Handbook. This highlights the list of do’s and don’ts to be followed during occupancy. This handbook is typically modified, depending on the requirements of the developer and the society.   

The nuts and bolts

The deployment of property management manpower in a housing complex is based on the total saleable area of the project. In general, it consists of five security guards, four houseboys and two personnel from the technical team for every 1 lakh sq. ft. The structure of the management team varies with the property and the scope.

For managing any housing complex, a team which consists of a Property Manager, Housekeeping Executive, Security Officer, Technical Manager and Helpdesk Executives forms the core management team. This team is based on-site and further manages a team of Houseboys, Security Guards and technical support personnel, all of which are also stationed on-site.

There are schedules made for carrying out preventive maintenance, and maintenance contracts are issued for key plants and equipment. The on-site team's role is to coordinate with the vendors servicing these contracts, and to ensure that all activities are carried out in a timely manner.

Cost to developer or society

The average cost of professional residential property management is Rs 2-3.5/sq.ft. for normal projects and between Rs. 5-7/sq.ft. for premium housing projects. In the case of housing societies, maintenance charges or common area maintenance charges (CAM) are worked out to include all expenses required for operating and maintaining the society. Besides day-to-day expenses, these also include AMCs, insurance and sinking fund. The developer may typically add overhead expenses for infrastructure and resources provided by them to maintain the society. CAM charges are generally kept fixed for a period of 1 year and any upward or downward revision of the same may be done in subsequent years annually, with surplus or deficit being credited or debited to align CAM as per expenses.

Savings and other benefits

Significantly, the increase in interest in buying into or tenanting residential buildings that feature professional property management services – as opposed to buildings that do not - is between 30-40%. The cost savings to developers / project owners who opt for professional property management services rather than relying on their own capabilities depend on the type and age of the building. However, a saving of at least 5-7% is generally achievable in the initial stage. This figure cumulatively increases as the various processes being implemented edge out redundancies and increase efficiency.

Personnel training

A specially trained work-force is a critical aspect of professional property management, and this cannot be compromised on. Though most employed personnel comes with prior experience, the landscape of this services vertical itself if changing constantly. Buildings are being designed or re-designed to comply with emerging technologies, safety parameters and sustainability standards, and upgrades to overall operational efficiency are a constant process. Also, specifications of buildings and the facilities and functions that need to be maintained tend to differ from project to project. For this reason, property management employees at all levels need to undergo constant upgrading of their knowledge and hands-on skills.

In the case of professional property management services by IPCs, such training is provided on a daily basis to the basic level staff, which includes the houseboys and security guards. This training is usually imparted when the shifts change to ensure maximum attendance. The duration varies from 15-30 minutes. Advanced training is imparted to on-site managers and executives. These training sessions are given by regional experts and can last between 1-2 hours. A happy by-product of this training regimen is that property management employees at all levels are enabled to advance their careers within the firm by proving themselves equal to more challenging roles.

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