With the growth of the Indian real estate market over the past decade and the increased focus on the quality of buildings by buyers and sellers, Property & Asset Management will play a vastly amplified role in the immediate and long-term future.
Jones Lang LaSalle India
Even globally, Property & Asset Management practices have taken time to evolve into a sophisticated business and delivery model. However, its benefits are now available in India in the form of comprehensive real estate management. This includes two important and independent, though inter-related functions – Property Management and Asset Management.
‘Property Management’ is a discipline that integrates people, place, processes and technology to ensure the day-to-day operational functionality of a real estate asset. It involves handling of the routine operational functions on behalf of developers (engineering, security, soft services, landscaping, etc. Further, Property Management involves planning and implementing strategic management plans such as coordination and procurement of service agreements, vendor management, risk management, operational health and safety, and effective human resource management.
‘Asset Management’, on the other hand, is a long-term function. It involves creating and implementing strategies to optimize financial returns from a real estate asset, and includes augmenting income streams, lease management, risk mitigation, and enhancement of the utilization of the real estate asset in terms of benefits and financial returns.
Importance of Property & Asset Management:
Property & Asset Management plays an important role in the real estate lifecycle:
Stage 1: Pre-Occupancy Management
- Coordinating the physical plan and design with the management plan
- Benchmarking equipment and other operational costs.
Stage 2: Post-Occupancy Management
- Continuous upkeep of both built environment and equipment
- Minimizing operational risks.
Stage 3: Renovation Management
- Reassessing the on-going services and infrastructure to optimize physical conditions.
The adoption of professional management practices from the pre-occupancy stage optimizes a real estate asset’s performance and reduces its operating costs. This beneficial confluence of process efficiencies and cost savings is possible because Property & Asset Management can assemble various resources, capabilities and technologies across the lifecycle of a real estate project to achieve the best possible delivery outcomes.
The Indian PAM Scenario Today:
With the growth of the Indian real estate market over the past decade and the increased focus on the quality of buildings by buyers and sellers, Property & Asset Management will play a vastly amplified role in the immediate and long-term future. Developers as well as companies have understood and accepted that professional management of a property results in very significant cost savings, increased customer satisfaction via improved environment, and better safety levels.
Outsourcing PAM services enables developers to concentrate on their core business and leverage the expertise of specialized service providers. Developers now engage the services of International Property Consultants (IPCs) to deliver their requirements for PAM, which is no longer viewed as a luxury expense but as an effective tool for property maintenance, management and optimization. This change in mind-set is very evident in the increasing number of housing societies that now use professional property management services by IPCs as a matter of course.
While the PAM industry in India is doubtlessly still at a nascent stage, it is evolving rapidly as a result of the fast pace of growth in the construction sector. With a massive supply of real estate projects coming in the near future, the availability of high-quality property maintenance and management will be a distinguishing factor for the consumers of these projects.