“Property management is such a frustrating job because many of us are not trained engineers,” declared Julian Cheng, General Manager of Sunway Group’s Property Management Division. In a talk to peers and industry professionals titled ‘Towards 1st Class Management: Effective Management of Service Contracts and Providers’, Cheng explained that a large percentage of property management work involved some aspect of engineering and property managers sometimes struggle to properly elucidate to tenants and stakeholders.
IT’S A PEOPLE BUSINESS
Cheng was quick to say that property managers should not be disheartened by the sheer volume of complaints that they face but rather focus on the fact that they actually control and manage a large portion of the economy’s resources.
This includes the land, buildings, assets and machinery as well as the human capital. “I totally agree when property managers say we are in the people business because you always need to get the right people in, otherwise it can get messed up,” he said. “But be motivated that property managers are responsible for a large chunk of the economy.”
The next point that Cheng highlights had to do with putting in place what he terms “a first class property management system”. This, he says, is not the standards set by property managers or even the tribunals but rather what the customer wants.
It is in his experience that from years of dealing with complaints, many property managers develop a sense of detachment. Cheng’s first piece of advice to the assembled professionals was to get over this psychological barrier, otherwise, they will not be able to service the needs of the clients or put in place an effective management system.
Cheng points out that despite current economic challenges, the market remains vibrant as Malaysia has retained its position as a preferred location for global enterprises, manufacturing plants and shared service centers.
Property managers will have to deal with highly qualified and established professionals thus property managers must uplift themselves to the required standards. That means having the requisite knowledge and systems to be able to service these clients’ needs. One example he highlights is being able to effectively offer the ‘Internet of Things’ which includes free wi-fi and other relevant systems.
“Don’t be blinkered by just maintenance,” he said. “Always think of refurbishment and asset enhancement initiatives.”
THE OUTSOURCING OPTION
Cheng concedes there is no right or wrong answer when it comes to deciding whether to outsource management services or to build an in-house team. Both have pros and cons. He says that in the realm of the property manager, response time is a key factor and, in most cases, having an in-house team will ensure that the issues are tended to immediately. Another plus point for having an in-house property management team is ensuring the retention of knowledge as well as having a skilled task force on hand. Also, an in-house team allows for greater management control and for closer data analysis.
The flip side is that the cost of having an in-house team can be extremely high and such a team can become ineffective over time. An outsourced contractor will provide greater specialist knowledge and can also be more cost effective. It could also be argued that outsourced contractors are more accountable. Cheng says the right option is very much tied to the size of the organisation and its in-house capabilities.
Cheng counsels that in order for property managers to become world class is to always back up all services with measurements and/or data. He cites the example of an air-conditioning system where he pushes his staff to include substantive data of the aircondition unit’s performance.He implored all property managers to make use of readily available data and knowledge, for instance citing the manufacturer’s performance claims. If an organisation is going to invest millions of Ringgit in equipment, it makes sense to hold the manufacturer to its performance claims, such as energy efficiency. “Always have these details outlined in a contract,” he advised. “This will prevent us from being cheated.”
He was also very keen to stress four important factors at the ‘building works’ stage:
2) base cost
3) variation orders
Cheng pointed to ‘variation orders’ as a common trap which property managers fall into, where contractors will bid the lowest but later on make many variation orders. He asked property managers to be mindful and alert to this factor to avoid spiraling costs.
‘Measured performances’ and ‘customer satisfaction’ are two ways which can push property management forward in Malaysia.
A CLEAN HOUSE
“I always tell my property managers that their job is like a housewife’s. The house will never be completely clean because there are so many things happening at once. Don’t be dejected by the complaints. Learn to look at the big picture. You cannot do it alone and you cannot completely rely on others. You must have systems, knowledge and you must embrace technology,” said Cheng in conclusion.
This article was first published in the iProperty.com Malaysia December 2016 Magazine. Get your copy from selected news stands or view the magazine online for free at www.iproperty.com.my/magazine.Better yet, order a discounted subscription by putting in your details in the form below!