As soon as fund managers find the property market difficult to place money in, and uncertainty prevails, they start to look for other things to apply their ever-inquisitive minds to.
That’s why, across Europe, all the major fund management groups are currently investing large sums in transformation programmes designed to use the best of new technology, but, more importantly, join up their data into a seamless whole which can be used to extract more value. We’ve seen the proliferation in the last 20 years of data bases and property management systems; this new wave of projects is something different. Fund managers want instant access to their asset data, and they want to be able to rely on their analysis without making assumptions about its cleanliness.
Some of the drivers in these projects come from the equity and bond divisions of the firms which you could argue lend themselves large scale data management and analysis. However, the argument for real estate to keep up with these other markets is driven more by the new availability of large amounts of data from previously untapped sources.
Remit’s own research (REMark Report 2017) tells us that the number of property management accounts has halved in the last few years as financial data becomes more accurate and easily reportable. By contrast, facilities management staff have doubled in numbers in the same period. We have long predicted that the impact of building level services on the value of the investment will define the market in years to come and this increase reflects the staggering increase in regulations and tenant/customer requirements over the past few years.
Additionally, the advent of smart buildings, with ubiquitous sensors, and the advent of 5G telecommunications only a couple of years away from widescale use in Europe, means that the opportunity to capture much larger amounts of useful data about investments is there for the taking.
And, of course, should buildings start to be traded regularly and openly on an exchange like IPSX, the requirement for up-to-date, accurate, data from the assets will be paramount.
There’s an elephant in the room, though. Will we need asset, property and facilities managers if building data is being analysed by machine and routine operations are being carried out automatically? The RICS report, The impact of emerging technology on the surveying profession set out reasons why 89% of current property tasks will be automated.
The global fund managers are looking at this in their projects. There is a huge emphasis on customer experience and many jobs will still require people – for example, front of house, contract negotiations, specifying work to be done and creating value through refurbishments and redevelopment. However, the people undertaking this work will be supported by the analysis of data; this is where the machines will free up time for humans to be better.
The opportunity this presents is to reimagine what each of these roles does and who will do them. We should be finding people for property management who see this as a career in itself – not the traditional view that the job is done as a stepping stone to being an asset manager.
Remit’s regular PAM Forum, held in London, where many of the top property fund asset managers meet quarterly to exchange views recently considered ”The Perfect Property Manager”. Many views were quite traditional and the overall impression was that being a property manager was lower in status than many other property jobs. This is a completely different view from those in technology companies who are now targeting elements of the property manager’s market – they see it as an exciting opportunity for their customer friendly staff to provide an excellent service. It is a career in itself.
The opportunity for asset and property managers is clear. The fund managers will be employing firms which have strong data analysis skills and who can identify and hire customer focused managers. The underlying requirement for property knowledge will be there but it will not be a differentiator.
The winners will be those firms that analyse data as expertly as those in other investment sectors, and can keep their direct customers, the tenant happy and profitable.