How would the future of real estate management look in the new post-COVID reality? What will be the key challenges? Experts from Knight Frank present their predictions on the future of the property management market and talk about the expected changes.
The expert predictions are guests from:
Izabela Miazgowska, Head of Property Management, Knight Frank Poland
Nela Sotonova, Business Development Director, Knight Frank Czech Republic
Igor Gacek, Head of Property Management, Knight Frank Czech Republic
Neil McLocklin, Partner, Head of Strategic Consulting EMEA line, Knight Frank United Kingdom
What are the main challenges that real estate management teams are facing today?
The coronavirus pandemic has led to a crisis situation in many European markets. In most cases, there has been a freeze on the economy and a slowdown in the commercial property market. “The paradox of the situation is that, despite significant limitations and restrictions, property managers are working twice as hard, responding to changes in the environment,” explains Izabela Miazgowska from Knight Frank Poland.
“The biggest challenge in the current situation is uncertainty and the need to make quick decisions in such circumstances and this requires a consistent and credible information policy towards all stakeholders. We also observe how important it is to prepare and implement specific procedures of behaviour in order to organize operations and check, whether all necessary activities have been performed,” adds Izabela Miazgowska.
“Another challenge we see in all markets is that the property management departments must take numerous precautions related to the new hygiene standards,” comments Nela Sotonova from Knight Frank’s Prague office. “This is a newly established criteria that property managers will have to accept and meet even after the crisis.”
“The safety of employees who are already gradually returning to their offices and the adaptation of buildings and office spaces to new requirements is also becoming one of the key topics for discussion,” explains Neil McLocklin from Knight Frank UK, who, with the Knight Frank global team, has developed guidelines for returning to the offices, learning from Asia where they have been returning for two months now. Based on his experience and knowledge, he adds, “We see how many aspects need to be taken into account when creating a strategy for buildings to meet the social distancing measures and cleaning requirements. It’s not just about keeping the right distance between people or providing the right disinfection regime, but above all changing the behaviour of the people as they return to a very different workplace.”
Is it possible to predict today at least some of the changes that await the property management area? What will be the key challenges in the future?
“I think it’s too early to make a final assessment. The key challenges which property managers currently struggle with, and will continue to face in the future, are to optimise the management of their operating budget so as to achieve savings while ensuring that the property functions properly. It is important to minimize the scope of work of certain external services, as well as to reschedule the equipment and installations in buildings to fit it to a limited number of tenants. At the same time, we are ready for the return of employees to the buildings and the implementation of appropriate procedures,” explains Izabela Miazgowska.
“In all cases, both the requirements of landlords and the needs of tenants must be considered. It is also necessary to ensure the safety of the tenants of these buildings, their guests and external company employees. Infection can occur every day, so it is important to follow the procedures set by managers, as well as an increased sanitation regime. Communication plays a very important role in this respect, as the situation may change dynamically and thus require immediate and appropriate action,” adds Izabela Miazgowska.
“On the other hand, we are also forecasting changes in the asset management itself, which is mainly due to the fact, that the income of building owners will be lower for various reasons. This may be influenced by lower rents and higher incentives that some property owners decide to introduce to keep tenants in the building. It should be taken into account that the desire to attract more tenants will require a new approach than before, as they will choose from an increased market offer,” adds Nela Sotonova.
“Thinking about the future may prove to be a key factor in surviving this unusual situation. Those who will be able to quickly adapt their offices to new requirements such as higher standards of hygiene, or to provide the right and rearranged space to ensure a social distance of 2 metres in the Czech Republic and Poland (UK 1.5 metres) between employees will come out from this situation as winners,” adds Igor Gacek from Knight Frank Czech Republic.
What solutions can support real estate management in the post-covid world? What kind of technology can be used in buildings?
“There are many tools on the market that support property management and have proved to be useful in a pandemic. In their daily work, managers use various IT systems, helpdesk platforms or mobile applications. Solutions of this kind make it easier for us to work remotely, which is so important nowadays, enabling automation of certain processes. These tools can be used to handle individual buildings, but also large portfolios of real estate dispersed across the country. They streamline both the processes related to property management and maintenance. They function as a database with easy and immediate access to documents, facilitate the analysis of specific processes (e.g. in terms of removing reported faults and tracking the status of their implementation), control the consumption of utilities, the implementation of the operating budget or the execution of mandatory reviews, and generate various types of reports according to the requirements of our clients. One of the most important functions of these tools is to optimize operational costs related to real estate service,” describes Izabela Miazgowska.
“At the same time, there are many tools that can significantly improve the quality of life for the users and guests themselves. Just to mention all contactless devices or autonomous reception kiosks that help to reduce the risk of infection transmission. Also all kinds of building applications that combine many functionalities such as entry cards, parking access cards and access to key building information. Such modern solutions are very useful for property management, especially when integrated into a building faults reporting system,” adds Nela Sotonova.
“The situation of the global crisis caused by the virus has shown how important in crisis management is the expert knowledge of people specializing in the field. Understanding the activity of people in the new workplaces through, for example, Knight Frank’s ACE platform, is a good way to understand and monitor how people are actually behaving and any risks. Desk booking and sensor platforms can trace who an individual has been sat next to if they do get infected and appropriate safeguards can be made. Fever scanning technology is also something that we have seen rolled out in Asia which gives people a lot of comforts, even although it is not full proof. We are starting to see this in Europe, and in the US they have changed the law to allow it,” explains Neil McLocklin.
Can modern technology help optimise building management? If yes, in what way?
“Today, modern technology is an integral part of every person’s life and plays an important role in property management. I mean first of all the automation of processes, which increases the level of provided services, as well as efficiency and safety. Thanks to the use of new technologies, we can react faster to faults that occur, and even predict their occurrence before they appear,” explains Izabela Miazgowska. “We manage the space in the building better by monitoring its use and thus adjusting the frequency of cleaning and the need for lighting. We are able to monitor the consumption of utilities on an ongoing basis and by managing them properly we can lead to increased energy efficiency. Modern monitoring with motion detectors and intelligent image analysis enables us to reduce the number of security staff and increase the level of protection. Moreover, the use of new technologies in commercial properties makes them perceived by tenants as an attractive place to work and by investors as investment products of a higher standard.”
The opinion of Izabela Miazgowska is confirmed by Sotonova “Undoubtedly, the implemented modern technologies would already be extremely helpful in crisis management of buildings, as well as in organizing the return of employees to their offices. The discussions will probably first of all focus on modern air filtration systems, which at the same time will ensure appropriate disinfection of the space. Also appropriate sensors detecting potential threats, including viruses, will now be an important topic. It all comes down to the use of intelligent infrastructure in buildings, which will regularly report on all, even the slightest deviation from the norm.”
“In this much-needed discussion on the future of technology in building management, we must not forget the most basic element in management, which is proper and regular communication between building owners and tenants. New technologies are meant to support this dialogue, but will never fully replace it,” explains Igor Gacek.