RESIDENTIAL PROPERTY MANAGEMENT IN INDIA

With time, perceptions have changed and developers have begun opting for professional management services by International Property Consultants (IPCs). They now see them as more than just manpower vendors and accept property management as a specialized and cost-saving service. This change in mind-set is evident by the increasing number of housing societies that are now engaging IPCs for professional property management services.

Today, the market for property management by IPCs in India is valued at around INR 1000 crores, and it will grow by at least 20% annually. The maximum demand for these services is in the NCR region, which has seen a massive supply of projects and has an equally staggering number of projects in the pipeline. The second highest demand comes from South, primarily Bangalore and Chennai. In Mumbai, these services are preferred more for the commercial office buildings and high-end residential societies.

Making a Decisive Difference

Usually, limited integrated service providers venture into managing of residential condominiums and ensure that the (Resident Welfare Association) nominates members for responsibilities of maintaining and employing security & housekeeping companies directly to reduce the cost. This is a redundant model. Companies like JLL have core expertise to manage these services, across local geographies with international synergies for best practices. In other words, IPCs specialized in property management provide a one-stop solution and additionally support in various technical aspects to professionally and cautiously manage safety, security, cleanliness, etc., and maintain very strict adherence to statutory requirements. This ensures both tangible and intangible benefits.

For residential property management to become feasible for both the client and the agency, the total saleable area of the project would be around 300,000 sq. ft. for a mid-level housing society. The general list of services includes the following:

ü  Electro-Mechanical (E&M) Services

ü  Housekeeping Services

ü  Security Services

ü  Club-house Management

ü  Events Promotions Management

ü  Promotion Displays / Space On Hire

ü  Help-Desk / Concierge Services

ü  Hardscape / Landscape Management

ü  Garbage Management

ü  Events & Promotions Management

ü  Vendor Management

ü  Annual Maintenance Contract (AMC) Management

In the case of cities like Mumbai, there is demand for enhanced services which includes additional aspects such as club house management.

Residents’ Responsibilities

Though professional property management in residential complexes encompasses a multitude of functions and services geared towards providing a comfortable and hassle-free experience for tenants, there is a certain onus of responsibility on the tenants as well. Without such cooperation, the smooth functioning of the project is bound to be compromised sooner or later.

To encourage this participation, two sets of guidelines are handed over to tenants. The first is the fit-out guidelines list, which highlights the do’s and don’ts that residents need to adhere to while undertaking fit-outs in their apartments. The basis of these guidelines is to avoid structural damage to the building. These guidelines also include a set of instructions pertaining to how to bring materials into their flats without causing disturbance to other residents. The other set of guidelines is an Occupant Handbook. This highlights the list of do’s and don’ts to be followed during occupancy. This handbook is typically modified, depending on the requirements of the developer and the society.

Cost To Developer or Society:

The average cost of professional residential property management is Rs. 2-3.5/sqft for normal projects and between Rs. 5-7/sqft for premium housing projects. In the case of housing societies, maintenance charges or common area maintenance charges (CAM) are worked out to include all expenses required for operating and maintaining the society. Besides day-to-day expenses, the expenses also include AMCs, insurance and sinking fund. The developer may typically add overhead expenses for infrastructure and resources provided by them to maintain the society. CAM charges are generally kept fixed for a period of 1 year and any upward or downward revision of the same may be done in subsequent years annually, with surplus or deficit being credited or debited to align CAM as per expenses.

Savings and Other Benefits:

Significantly, the increase in interest in buying into or tenanting residential buildings that feature professional property management services – as opposed to buildings that do not – is between 30-40%. The cost savings to developers / project owners who opt for professional property management services rather than relying on their own capabilities depend on the type and age of the building. However, a saving of at least 5-7% is generally achievable in the initial stage. This figure cumulatively increases as the various processes being implemented edge out redundancies and increase efficiency.