The role of the property manager no longer relates to simply administrating your clients’ investments – it’s about offering insights that deliver the best return on investment.
South Africa’s commercial real estate sector is evolving because of an increase in digital technologies available to better manage your properties. However, simply investing in technology in your commercial property management business isn’t enough to guarantee success. According to PwC, the changing real estate landscape will have several implications for real estate managers in the fast-approaching future.
In its report: Drivers of change for the Real Estate Industry, PwC’s experts say that high energy prices, climate change and government regulation will impact the role that property managers play in ensuring success for their clients. The report also notes that the role of property managers will include more than just administrative support; as investors will rely on their property managers for added capital expenditure insights.
According to PwC’s report, commercial real estate investment will require greater global specialisation by property managers, as more risks will emerge. Your ability to assess both local and international risks and provide solutions to mitigate it will enable your customer’s to make fast, sound, financial decisions.
Here are PwC’s three predictions on the roles that property managers will have to play in 2020 and beyond:
Role 1. Offer a ‘global thinker’ perspective
PwC’s report describes that real estate managers will need to think globally, as global investable real estate availability will expand – particularly in emerging markets. This means that investors are going to be coming to you with investment ideas in particular areas that they’ve read about or been told about.
It’s up to you to ensure that you remain abreast of global investment opportunities, rather than remaining focused on localised opportunities. Should there be a shortage of properties in the local market, you don’t want to be in a position where you’re turning potential investors away because you don’t have enough knowledge of a particular market’s property availability.
Role 2. Offer underlying economic insights
Due to the rapid urbanisation of cities, particularly in South Africa and other emerging markets around the world, there’s going to be opportunities for your investor clients to diversify their portfolios globally. Although, simply selling properties in these urbanisation hubs isn’t enough.
Add value to your investor’s purchasing decisions by remaining on top of the underlying economic characteristics of popular emerging market cities. This doesn’t necessarily mean you need to know everything about every country, but it does mean that you should to find a niche market or markets and invest in learning those markets’ characteristics well.
Role 3. Offer realistic asset valuations
There’s a growing number of property investors, globally and locally, that prefer to invest in modern buildings that utilise technology. ‘Green buildings’ will remain a popular choice for investors into the future. It’s important that all your valuations are based not only on traditional evaluation methodologies, but also encompass the value of technology upgrades to the building.
Take for example the rise, and rise, of electricity prices in South Africa. A commercial property that is able to self-sustain will be far more attractive to your investors than an energy guzzling property. Also, some global markets have embraced smart technologies like AI-controlled heating and ventilation systems or smart-lighting systems that turn off if the building’s empty. It’s up to you to know how tech contributes to the building value so that you don’t have to hard-sell features, instead of benefits.
To remain the go-to commercial property investment manager in the future, you need to stay abreast of several factors that influence how investors are going to spend their money. PwC explains that investors will align with property managers that make decision-making easier. Success no longer hinges on your money-collection systems – it’s your insights that will count most.
· The role of the real estate manager is evolving – Investors will be turning to you for even more insights and perspectives on both local and global market opportunities.
· Remaining abreast of developments (technology, regulations, economic factors) will elevate your prominence in the eyes of investors.
· Technology, sustainability and environmental impact will become a greater concern amongst investors, which means you need to know the difference between an energy-guzzler and a ‘green building’.
Standard Bank BizConnect.