Whether you realise it or not, most buildings have a property manager. In a family home, it is often the men who take on this role with varied levels of enthusiasm and success. In a school, a care taker, and all the way from a family home to the Burj Al Arab in Dubai, there are property managers taking care of their properties.
This has not been the case in Cambodia where property management has been a widely neglected task. Developers have frequently forsaken property management in the belief that lower running costs will increase profits margins. This can be true in the short-term, or if the property is small enough and someone is willing to invest his or her own time to maintain the building. More often than not, however, this is not the case and the mixture of a sub-tropical climate, low quality materials, sub-standard construction techniques and poor maintenance, sees buildings age rapidly.
This has led to the shortened life-span of buildings throughout Phnom Penh. Properties less than 10 years old look more than 20, while buildings 20 years old, look closer to 50 (granted, they have endured much tougher times).
Moving forward, more attention needs to given to maintaining Cambodia’s buildings. Such properties help define a city and greatly affect the overall image and character of a place.
With the emergence of Phnom Penh Tower and, in the near future, Vattanac Capital, investments in property are no longer short term. Large capital sums are being invested across all real estate sectors with developers planning ahead for the upward turn of the global economy and growing local market. Cambodia and especially Phnom Penh will see new retail, office, residential, hotel and leisure developments springing up across the city and country in the years to come.
While some developers, such as those developing multi-storey office complexes, are aware of the need for good property management, the majority of developers in Cambodia are not and remain focused on short-term profit margins.
If you drive around Boeung Keng Kang today, for example, you will see an ever growing number of six to eight storey developments (many stop at eight storeys due to planning policy and permits).
The majority of these developments are destined to become serviced apartment complexes where the market is almost exclusively driven by expatriates and long-stay visitors.
This target audience expects high quality services, accommodation, facilities and maintenance, yet the majority of developers neglect property management.
Without good property management, the aesthetics of a building, the services - such as customer service, maintenance and repairs, internet provision, cleaning, and security will suffer.
Facilities, such as lifts, gymnasiums, spas and swimming pools will also deteriorate, and it is likely health and safety will almost be completely neglected. Effective property management will always benefit a building and is a good way to retain tenants.
Poorly managed, tired looking properties will quickly find they cannot compete, as newer, higher-quality projects enter the market and developers and investors will see their revenues erode (rents and occupancy rates fall) as the value of an asset diminishes.
One skill property managers would bring, in the long-term, is the ability to plan out maintenance schedules for major equipment. This activity increases the life expectancy of equipment and will save landlords significant sums of money.
These maintenance schedules predict what components will wear out first and by doing so prevent broken parts rendering entire machinery and equipment inoperable. Property management is about being pro-active not reactive, hence preventing issues from occurring before costs spiral.
What is required in Cambodia is a change in the attitudes of developers and investors towards effective property management, for the benefit of the buildings and for the profit margins of the developer, but also and importantly, Cambodia needs to develop its own skill set in the national population, more education is required for Cambodian nationals to learn about and engage in property management and real estate.
Simon Griffiths is a property manager with CBRE Cambodia. [email protected]