The work-from-home paradigm has sparked a rethinking
While most service providers in India are emphasizing health, wellness and sustainability in both residential and commercial complexes, others are looking at shifting their focus from residential property management to institutional and commercial operations.
Colliers International Group Inc., whose current portfolio comprises more than 135 mn sq ft spread across different asset classes, has decided to shift its focus from the residential property management segment and “channelize its investments and developmental activities by strengthening asset management services (AMS) to institutional and domestic commercial developers, embracing new-age technology platforms that align with its global sustainability (ESG) initiatives,” said Ramesh Nair, CEO, India and MD, Market Development, Asia.
“Globally all businesses of international property consultancies are typically focused on commercial real estate. It is a B2B business. Also, margins are higher in commercials. The industry is currently getting consolidated and the top 20 developers in the country will only become bigger. We will be focusing on the commercial portfolio and will be utilising the manpower earlier deployed in residential into commercial,” Nair said.
A few more facility management firms are considering shifting from managing residential complexes to commercial towers because the collection of management fees in the latter is regular and sustainable. Besides, there are fewer complexities and more focus associated with managing commercial properties.
Commercial property owners are more forthcoming when it comes to paying maintenance fees on time as they are conscious of the fact that a well-maintained complex has a direct bearing on property valuation. They are also dependent on corporate entities for their rents. Collections are therefore relatively more regular, experts say.
Cushman and Wakefield Property Management Services India Private Limited is planning to increase its footprint in the residential space and sees it as an opportunity at a time when most people are working from home and attendance in commercial projects are low.
“Housing demand has picked up over the last few months and it is a matter of time before demand for office space will also gain pace. Therefore, right now we are focusing on getting more clients in the residential space but without ignoring anything in commercial as the facility management cycle is long. Over the last few months, we have bagged 22 new contracts. We are actively participating in RFPs, tenders, discussions with the commercial space providers. The pace of closure of residential contracts is much higher,” said Manoj Sharan, managing director, Cushman and Wakefield Property Management Services India.
Cushman and Wakefield’s total footprint in the facility management space is close to 160 mn sq ft, of which 25% is made up of the residential component and the rest is commercial (office space, retail, manufacturing, warehousing establishments).
The demand for providing integrated facilities management solutions is on the rise across sectors such as healthcare, education and government institutions in addition to commercial office spaces.
This is expected to fuel higher investments in the sector over the next few years. Going ahead, there will be more investments in ‘technology’ as an enabler as organizations look to automate several aspects of building management, Sharan said.