Demand for management services grows

As the real-estate market in Thailand evolves, demand for property management services has been on a rapid rise, according to Jones Lang LaSalle, a professional services firm specialising in the sector.

Three major factors have driven this demand: a greater number of property developments, the increased awareness of property owners and investors regarding the necessity to secure professional management of their properties, and growing demand from property funds.

Jones Lang LaSalle says Thailand is fast bccoming a big market for property management services.

In Bangkok alone, there are 421 office and 495 condominium buildings (in central Bangkok) in operation, compared to 2,000 when there were only 388 and 244, respectively.

While the majority of condominium buildings are managed by third-party property management service providers, Jones Lang LaSalle estimates that only about 30 per cent of office buildings are managed by service providers. The firm expects this percentage to rise as more owners have outsourced property management functions to independent service providers.

The rapid expansion of Jones Lang LaSalle's portfolio of property under management from 2.3 million square metres in 2008 to more than 3.5 million square metres at present - more than 50-per-cent growth-is a testament to this trend.

"After a long learning period, many owners realised that developing a property is one scpecialty, while managing that asset is another. Property management is more than just houekeeping and security work. There is plenty of evidence that without professional property managment, real-estate asets can significantly depreciate in value, no matter how well they were buil," says Suphin Mechuchep, managing director of Jones Lang LaSalle.

Another emerging source of demand for property and assetmanagement service is property funds, whose number is growing. More funds have outsourced droperty and asset-management functions to professional property and asset-management service providers to minimise risk and ensure transparency and the highest return on investment for their shareholders.

In addition, property management requirements are becoming increasingly complex as building design, construction and technology have evolved. Many new and modern property developments are coming on stream, and these developments require a higher level of property management offering more sophisticated technical and engineering support.

Property is an investment asset, and thus owners need to enxsure not only he lowest operating cost and optimal efficiency of the property, but also the highest returns. In optimising the asset value, transparency, risk management and compliance are also key considerations. The integration of these objectives has resulted in the field of asset management, Suphin said.

Asset management is a new business on which the company is focusing. Like property management, asset management focuses on minimising the risk of value depreciation. It also focuses on strategies to help owners and investors enhance real-estate asset value and maximising income streams on property assets, such as leasing strategy and property repositioning, she added.

THE NATION