(re)imagining Property and Asset Management: What’s in store?
Let’s take a look at five key trends that are likely to emerge as the paradigm shift happens.
Never has the time been more opportune for property management to shift gears, not only to propel its growth, but to make a meaningful difference to its clients and end customers. The COVID-19 pandemic has challenged the status quo on service delivery approach and operating models to the extent that it is going to fundamentally change how the assets are managed for better in future. Let’s take a look at five key trends that are likely to emerge as the paradigm shift happens.
It may still not be the time for the conventional model to become obsolete but with cost optimization becoming one of the key drivers, the flex service delivery models are likely to emerge much stronger than ever before. Those with the ability to customise end-to-end solutions from asset life cycle perspective, delivered either as Total Property Management (TPM) or Modular Solutions, are bound to make substantial gains. In essence, the operating models will evolve from the current individual site based approach to hybrid of 'on-site' and 'on-demand' workforce. This would bring in cost efficiencies through shared workforce for the activities that can either be performed remotely or at site periodically instead of requiring daily presence at site. This would in turn lead to expansion of organised Facilities and Property Management segment that currently stands at only 12 – 15% of the total market size.
Emerging indicators of asset performance
With enhanced focus on occupant safety, irrespective of the specific solutions mentioned above, health, wellness and sustainability will increasingly become the lead indicators of asset performance. While LEED certification has already gained traction from the perspective of sustainability, there is increasing interest from the conscious developers/ investors on getting WELL certification for their assets from the perspective of human health and well-being, that would create differentiation for the occupiers and end users.
Transparency and effective communication
The need for enhanced transparency and effective communication will become mainstay of all clients, irrespective of their type and size. Not only the large clients who have been engaging organised Facility Management players to manage their assets, even the smaller ones would start exploring a more structured approach to manage their facilities/assets to mitigate the risks. The spend limitation that such smaller clients may have, would give rise to the ‘out of the box’ solutions in order to address needs of all types of end users.
Repairs and Maintenance (R&M)
As big an opportunity as the Facility and property management, R&M will move from traditionally unorganised segment to a more of single window aggregator model to ensure quality and certainty of the work at the right cost. Also, annual maintenance contracts, which have been the cash cow for most of heavy equipment manufacturers, will move away from predatory pricing and adapt to the reality of current times, hence providing better cost efficiencies in overall cost of asset management.
Innovation and technology
The future of the industry continues to remain robust, though the conventional intense manpower based model will pave way for the technology enabled leaner models of service delivery. Times likes these spring up innumerable opportunities for creative and innovative solutions. For now, it may seem more of a cautious approach but eventually, the scale at which the technology will be leveraged to manage assets will far exceed the current levels of deployment, whether it is from the perspective of Clients, End user or Asset Manager. Such technology interventions will include AI/ IoT based solutions to provide completely touchless experience through motion activated lights/ doors, voice command smart screens, infrared scanning, heat sensors and self-cleaning spaces apart from complete shift from preventive maintenance to intuitive predictive maintenance from building management perspective.
Needless to say that these are the interesting times. As we wade through these, what would emerge is a set of new principles, new guidelines and new solutions, sustainable and agile at the same time. Having said that, it would be important to mention that this will not be devoid of challenges associated with such change.
We are in the midst of a tectonic shift, which will change the way we live, work and play.
Author: Dinesh Wadehra, MD - Property and Asset Management, India, JLL