Management monopoly games

SOME of the larger real estate agencies risk a conflict of interest because of a monoply on premium grade and A-grade properties under their management, according to smaller management company NSC Corporate.

NSC director Nick Stanisis said it was very difficult for some agencies to fill vacancies within one building because often the new tenant would come from another building they also managed.

“What we found from a leasing prospective is that a lot of people leasing property out there are also managing them,” Mr Stanisis said.

“And you’ve got a couple of groups that have a fair proportion of market control and all of a sudden you have a situation were you are robbing Peter to pay Paul.

“If I manage 70 per cent of the city before I start, I can’t talk to 70 per cent of the market because they are my clients.”

He said this meant the company could not talk to many of the potential tenants around Perth because this would disadvantage another client.

“So when I’m trying to service one client I basically have one arm behind my back by virtue of the fact that I can’t go and upset my other clients,” he said.

His partner Steve Carulli agreed.

“We’ve found that as our management has grown we have had to monitor the situation but we are still no were near the size in terms of conflict and that’s a big part of being successful,” he said.

“If you can go and talk to all and sundry, your ability to perform is enhanced because your competition on the building or your joint agent has a ‘no go’ zone.

“Clearly, if they pull someone out of a managed building obviously the owner is not going to take to kindly to that.”

Mr Carulli said some of the agencies had tried to distance themselves from the problem by establishing separate departments which do not liaise with each other.

NSC Corporate, while still a relatively small player in the commercial real estate agent industry in Perth, is starting to get noticed more by traditional players.

The firm started in 1994 when Nick Stanisis and Steve Carulli decided to go their own way after working together with the Hooker Corporation, then the largest agent in Perth.

Eventually Hooker became part of the Knight Frank outfit.

It was about that time that Mr Carulli, who headed the leasing department, and Mr Stanisis, in charge of the sales department, decided to move out on their own.

There are now almost 30 people working within the organisation which has four divisions: sales, leasing, outsourcing and property management.

One of the firm’s major clients is the Commonwealth Bank. NSC sourced properties from offices to homes for managers.

Mr Carulli believes institutions offer great potential for the real estate industry.

The growth in globalisation and the need to be part of a national group that can help facilitate these large clients was also seen as an important step for NSC Corporate when it joined with Cushman & Wakefield Worldwide.

But while the firm has aligned itself with a worldwide group which has a turnover of $800 million a year – second only to CB Richard Ellis with annual revenue of more than $1 billion – the two directors said they would continue to provide a strong local focus.

Mr Stanisis said the company wanted to act globally but think locally in the way they operated.

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