The future of property management
18. 1. 2022, Dominik Tyl
How property management will evolve in the future, viewpoints about the future work of property managers, and the future of property management itself
As in any other industry, real estate and property management are being gradually automised and augmented by sophisticated software and applications of various sensors and high-tech improvements.
Already today, property management software can, for example, send invoices or remind tenants of the end of the contract period, or provide online digital signature and verification services. In the future, these conveniences will be more sophisticated and more accurate. However, human workers will still be needed, as mentioned in the last paragraph below.
It is likely that property managers will lose some of typical administration in the future and will be able to focus on tasks that will require full attention. It is also possible that they will manage even more buildings than before thanks to the development of property management tools.
Against this, there are increasing demands on new constructions, both on the part of the Building Authorities and on the part of the tenants.
It is likely that new job positions that we have not seen before will appear in the field of property management or facility management. It is also likely that some jobs will disappear.
Radical changes in essential principles in the field of property management
Environmental, Social well-being, and Governance (ESG) factors will be the “Alfa Omega“ of the future of property management. High demands will be placed on environmental sustainability, how the tenants in the building feel, and the yield which flows to investors, especially when there are two or three of these factors in combination.
One such ESG element can be, for example, a carbon dioxide sensor in an office room. It has been proven, that if employees have the ideal temperature and fresh air in their room, they are more productive. If such a sensor will be able to open a window or otherwise ventilate automatically, it will enable a higher efficiency of employees as well as their comfort and satisfaction and the resulting productivity.
An example of this; thanks to the RICS - large group of cooperating real estate and construction professionals – and their ESG Partnership program, ESG elements are already being implemented in new buildings today, as can be seen in the Edge Olympic building in the Netherlands, mentioned by Stefan de Goeij MRICS in his lecture.
As a key step that could mean big changes for property managers in the future, I perceive that for new developments, experienced and professional property managers should be present not after its completion, but already during the planning phase of the building, and should be actively involved in consultation with designers and architects. This overlap can mean a major evolution in building management.
PENB (energy performance certificate for buildings) points
From 2020, in the Czech Republic every new construction over fifteen hundred square metres built by the public administration must have ‘almost zero consumption’.
From 2022, new residential family buildings will have to meet energy requirements up to a maximum of 75 kwh / m2 / year.
What users and tenants will expect, what will be important for them?
It is likely that tenants will be more demanding. For example, in office buildings, if the same trend continues as has till now, large office spaces have been rented by foreign companies that employ locals as a cheaper human resource.
Tenants' expectations will be lean more towards ESG factors. Companies that are still able to invest large funds in rent will focus more on preventing internal economic downturns caused by viral pandemics. One such requirement may be, for example, hepafilters in ventilation shafts or larger and more open spaces.
On the other hand, developers, property managers or real estate agents can use the new ESG elements as arguments to close better deals and compete on expensive leases with higher ESG quality.
Future of property managers, will they be replaced by technology?
They certainly will not.
Ten years ago some of my quite enterprising “hi-tech“ friends confidentially told me, that my work (real estate brokerage) will simply disappear in a few years. Of course they were wrong. Maybe they were aware and fully knowledgable about apps, new software, and smart improvements, but they forget about the one element that is essential - the human factor.
Agencies are changing, but not just melting away. Technologies are good and functional like a tool, but they are not making mistakes, humans are. Consumers and customers need to receive answers, and suppliers on another hand need to build trust.
I can learn from Ing. Ondřej Fukal’s MRICS lectures, there are two different types of property management service. One is ‘in-house’ formed by employees of a property owner, the second is an external agency.
The outsourced agencies are more focused on quality of service, because they have to be. They are always under pressure for competition.
In the Czech Republic there are a few property management companies with ‘full service’, but the real quality of property management is recognisable not at the start of cooperation, but when real problems appear.
I don't know how the property management business works from the inside exactly, only theoretically, but I dare say, that from the an outside perspective, property management can look like a stereotypical type of business. However, as with real estate sales, it is a relatively non-stereotypical field with an organic nature of problems and more often than not, more emotional issues rather than rational than it may seem. Property managers as ‘problem solvers’ have to combine psychology, experiences, empathy and humility and also an element of professionalism (especially in the situation that they are an external agency).
Of course property managers and management agencies are managing buildings. Concrete, steel and bricks do not ask questions, and don't have organic needs; people do. As long as there are buildings full of people with those needs, property managers will be needed as an integral part of the property management.
In summary, there are many options to automise everything, but sometimes it affects the fate of individuals like in this Bloomberg article about Amazon1. The article is more focused on the field of HR, than property management, but I can imagine comparable situations. For example one of the tenants may write a incorrect payment reference by mistake when they pay, and the system sends
them a lease termination, even if the payment is in the lessor’s bank account.
1. Bloomberg 28 June 2021: Fired by Bot at Amazon: ‘It’s You Against the Machine’