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The case for outsourcing management
Date published 12 October 2008
In a tightening market, managing income streams has become more important and more time-consuming for property owners.
Broll Property Management's MD Malcolm Horne says property owners are more actively managing these income streams to ensure the profitability of assets and returns to investors.
"The economy has brought a shift in the market. Owners need to take tighter control of core business and are increasingly taking on the traditional role of true asset managers and not that of senior property managers", says Horne.
For asset management to make sense and decisions to be effective owners need the support of solid property administration, and the "back office" administration function takes on a highlighted role with increased dependence on its efficiency.
Many property owners wish to control specific strategic aspects of their business without having to attend to the daily administrative functions of property management, he says. This has resulted in a new generation of outsourced property management.
"Traditionally, using outsourced property management has been 'all or nothing' process with owners either outsourcing the entire property management service, or doing everything themselves. This is not the case any more. There are now options between these two polarities and in meeting the changing requirements of property owners, a 'menu' of outsourced services from which owners can select the services applicable to their specific property needs is proving to be more relevant", says Horne.
"By outsourcing specific services and keeping control of other strategic functions, property owners can manage their buildings at tighter cost and more efficiently than if they managed the property themselves."
In Broll's case, the management "menu" of services offers property owners the option to select any one or combination of services includes accounting, utilities management, credit control, leasing, human resources functions, payment of creditors, receipting, property administration, operational management, lease renewal negotiations, project management, tenant installation and costly property management software and systems. Property owners can focus on growing their business rather than running their office, says Horne.
Henlie Durand of Retail Africa, one of Broll's management "menu" clients, says Retail Africa's financial support functions would have required the employment of full team including a CA, accountant, creditors clerk and debtors clerk with all the administration that goes with their employment.
"We selected to outsource this service and Broll executes all our financial back-office functions. It frees us from the ground-level Functions and is tailor-made by Broll to our specific needs." says Durand.
Property owners are not the only ones to benefit from this changing face of outsourced management. Now property developers, who have no need for the full spectrum of property administration services, can select only the services they would like to sub-contract.
Author: Sunday Weekend Argus
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