The last few years have been challenging for Property management (PM) firms as they had to navigate through the complexities which arose due to the Covid-19 pandemic, rising inflation, climate change, regulations, and increasing energy prices. The sector has successfully overcome all these hurdles through effective planning, ensuring timely measures to safeguard the residents, focussing on energy-efficiency practices to reduce operation costs, implementation of digital technologies to offer faster & improved services to the residents, and adopting environmental-friendly practices to combat issues arising due to climate change.
2023 has come up with all new priorities for them. This year we are expected to witness an increased focus of the property management firm on delivering more value to the landlords and residents and coming up with new initiatives to boost resident satisfaction and safety to stay the frontrunner in the competition.
Let’s find out what we perceive as the Top 5 trends to watch out for in 2023 in the Property Management sector –
Sustainability has become a key agenda for the UAE ahead of the 28th session of the Conference of the Parties (COP 28) Summit in the UAE. HH President Sheikh Mohamed bin Zayed Al Nahyan has announced that 2023 will be the ‘Year of Sustainability’ and has emphasized the UAE’s commitment to support innovation in the field of sustainability. There will be an increased focus of the PM firms on ESG and sustainability to minimize the impact of building operations on the environment.
“ESG” is an acronym used for “Environmental, Social and Governance”. It is a framework against which the sustainability and social responsibility of companies are measured. Due to climate change, ESG has become an important business consideration across the globe. The report titled – ‘What ESG investing means for MENA’s real estate’ by Cityscape Intelligence reveals that a vast number of studies have linked companies’ ESG performances to long-term profitability & financial resilience. ESG investing has emerged as a lucrative asset class for portfolios in the MENA region. There has been a surge in the number of real estate stakeholders who are prioritizing ESG standards like never before. ESG will be at the pinnacle in the priority list of property management firms this year.
Here is what ESG initiatives look like in 2023 in the Property Management sector-
The property management sector will adopt and embrace environment-friendly and energy-efficient practices to minimize the adverse impact of their operations on the environment. They will achieve this goal by focusing on two major aspects.
1.) Improving Energy efficiency
Improving energy efficiency significantly minimizes carbon emissions and has a profound impact on reducing the energy cost as well as the overall operational cost of the community.
To improve energy efficiency, property management firms will emphasize – installing 5 Star energy-efficient equipments and LED Lights & relay switches to improve energy efficiency and performance, installing more solar panels to meet most of the building’s requirements through solar energy, deploying Building Automation Systems (BAS) to keep a tab on energy consumption, creating awareness among the residents about best ways to save energy, leveraging technology to improve air quality, minimize carbon footprints, promoting biodiversity, building more greenhouses to promote greenery and reduce carbon emissions, and preventing natural resource depletion.
2.) Improving their Waste Management Process
Property Management firms will focus on improving their waste management process to reduce expenses for disposal and minimize the effect of waste on the health of the residents and environment.
Some of the ways PM firms will adopt to reduce waste production includes – building advanced recycling and waste management facilities, working towards a zero waste approach by ensuring the reuse of recyclable waste, deploying technology to track waste collection and reduction, utilizing reusable waste items on-site, composing the organic waste, and encouraging direct community member engagement and accountability.
As a part of the Social aspect, property management will be working towards launching more wellness and mental health programs for the residents, hosting community events & engagement programs, strengthening data protection and security to maintain the privacy of resident’s personal information, and working towards maximizing the impact of their initiatives on the local communities in which they operate and serve.
Property management firms will be strengthening their governance by designing policies, and standards which support corporate governance practices and principles and promote ethical behavior, and compliance. They will achieve this by launching robust compliance programs, promoting diversity, and inclusion, providing necessary training to the employees and service providers on compliance and governance, engaging with vendors/suppliers based on their recognized ESG standards, implementing AI-powered reporting platforms to build greater transparency for the stakeholders, leveraging technology to accurately report the residents’ issue, conducting a timely assessment of the risks arising from the climate change, prioritizing sustainable practices in the operations, and launching training programs to build a sustainable development mindset.
2. Increased Usage of Technology to Offer a ‘Personalized’ Experience
Creating an ‘Awe-inspiring’ resident experience will be the top priority of property management firms. A single instance of unit turnover costs heavily to the PM firms with more efforts required to boost the occupancy rate. As the general rule of customer acquisition suggests that acquiring a new customer can cost 5X times more to a business than retaining an existing customer. Resident retention will be the primary focus of property management firms. To achieve this, they will be focussing on automation and deploying advanced technologies to overcome the challenges faced by the residents. PM firms will also strive to offer more personalized experiences to make their managed communities a preferred choice for the residents.
Here are some of the ways PM firms will boost the residents’ experience –
a.) Proactive Maintainance: Studies conducted across the globe have emphasized the need to conduct proactive maintenance of buildings. It helps to create mechanisms to prevent and control the deterioration of the building and implement maintenance actions that are both reliable and economic. Proactive maintenance significantly minimizes the number of maintenance requests and ultimately leads to an increase in resident satisfaction.
c.) Streamlining the Lease Renewal Process: There will be an increased focus on streamlining the lease management process by sending renewal notices in advance and offering incentives to those renewing early. This will encourage renters to lock in rates with a longer lease term with property upgrades and improvements at the time of the lease renewal.
Streamlining the lease management process will reinstate the buildings and units which are now aging and enable the sector in getting new supplies.
d.) Building a more Connected Environment: Property management firms will be investing more in building a more connected environment by offering faster Wi-Fi and installing IoT devices. PM firms will also work towards modernizing other touchpoints within the community such as – access control and package delivery.
To learn more about how Kaizen AMS leverages technology to bring personalization in its communication with its 40,000+ residents in its 130+ managed communities, read our case study-5 Ways to Achieve Resident Satisfaction with Personalization through Technology
3. Working closely with the Family Offices
Family offices are rising at an exponential pace in Dubai growing because there is a demand for a corporate-like structure from wealthy Emirati families to manage their growing real estate, wealth, and assets. Dubai has a connection with Family offices for 90 years since the discovery of oil in the region. According to an article titled – ‘How to revitalise traditional family businesses in the Gulf’ by The Arabian Business, family offices account for more than 90% of the private sector.
Favourable decisions taken by the UAE government have made Dubai an epicenter for global elites. According to the Henley Private Wealth Migration Dashboard, the UAE was at the pinnacle in the world in terms of attracting High-Net-Worth Individuals (HNWIs) in 2022 and projected net inflows of 4,000 HNWIs. To cater to this substantial increase in HNWIs, Dubai International Financial Centre’s Authority Board approved the opening of a Global Family Business and Private Wealth Centre in the UAE in 2022 in a bid to welcome more Family Offices in the nation. This step has augmented the demand for Family offices and has encouraged several family offices from across the globe to open their headquarters in Dubai as many of these HNWIs moving to Dubai will be requiring their services to manage their real estate portfolios.
Family offices will be requiring the services of property management firms to ensure effective management of the properties. In 2023, we will witness PM firms working closely with the family offices to meet the demand and ensure the utmost client satisfaction.
To learn more about Family offices, read our blog – ‘7 Reasons for Rising Allocation of Family Offices in Real-Estate’
4. Investing in Research to Offer Excellent Customer Delivery
A vast number of property management firms will focus on increasing their spending on research & analysis to understand the dynamic requirements and expectations of the residents. They will invest in setting up research wings or centres to capture valuable insights into the expectations & preferences of the residents. PM firms will be regularly conducting online surveys and personal touchpoints to gain first-hand insights into resident behavior. Post that, Property managers and their teams will work on analyzing the best ways to implement residents’ suggestions captured through online surveys in the community to improve the living experience. Keeping an eye on the dynamic expectations of the residents will allow property management firms in taking timely measures to minimize tenant turnover and boost occupancy and resident satisfaction.
5. Increased Focus on Building Cybersecurity
With an increasing clientele and resident base, property management firms will be increasing their reliance on digital technologies to manage personal & confidential information. However, increased dependence on technology will also create an urge for property management firms to build a robust Cybersecurity network to prevent any unwanted & unforeseen cyber-attacks or security breaches. This year, Property management firms will be investing more in strengthening their cybersecurity.
Some of the ways to build effective Cybersecurity are as follows –
- Conducting Vulnerability assessments to evaluate the capability of their current Cybersecurity network to identify the vulnerability of their technology to cyber threats and ransom wares.
- Organizing Annual Staff Awareness Training to prevent internal error, privilege misuse, cyberattack, phishing, ransomware, and data loss as a result of employees not understanding their information security obligations.
- Performing Penetration testing to deploy the white hat and ethical hacking techniques to uncover holes in your existing Cybersecurity solution during a penetration test.
- Increasing IT budget to boost cyber security. Technology teams will work towards analyzing possible security threats, conducting timely assessments of their current security level, timely updating the systems, limiting access to the information to only those employees who need it to do their job, setting goals and outlining tactics, creating back up files, developing a robust security framework, and establishing plans for monitoring schedules, detections, and scientific ways to deal with data breaches or theft.
- Regularly reviewing Data-handling policies and procedures to ensure employees, customers, residents, and all business stakeholders understand their security obligations.
To learn more about the steps Kaizen AMS takes to safeguard the personal information of its stakeholders, read our case study – ‘Testing Kaizen’s Technology Infrastructure to evaluate its Vulnerability to Data Breach’.