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Managing the risk

MANAGING commercial property is a vital revenue stream for the bigger agents in the city.

It’s referred to as the bread and butter of the business, however the traditional role of a building manager has undergone some big changes as technology catches up with the property sector.

Imran Mohiuddin has just been appointed the executive director of Colliers International.

Mr Mohiuddin said the opportunity to work with a smaller, more dynamic team was one factor that prompted his move from Jones Lang LaSalle to Colliers International.

“I started getting tired with the industry and the fact it wasn’t changing fast enough,” he said.

“And I fell in love with the idea of using technology to serve people better.”

Mr Mohiuddin believes the industry needs to embrace technology in the field of property management, particularly in relation to the collection and collation of information.

“We are beginning to get the message from clients that they are not getting the solutions they want from the industry,” Mr Mohiuddin said.

As much as 20 per cent of a building’s value is stored in the knowledge of that structure.

“Every time a building enters a new phase there’s an enormous leakage of information,” he said.

With a comprehensive system that contains all the information about a building, including its history, the manager can concentrate on achieving cost efficiencies.

It’s a simple approach to using technology to cement all of this information and provide an invaluable management tool for the agency. And it can translate into real cost efficiencies for services such as electricity and telecommunications.

Burgess Rawson associate director property management division Michael McCormick said the property management side of the business had changed more in the past five years than in the previous 15 years.

This change has been driven in part by the nature of the tenants in the commercial properties and their understanding of the market.

“A lot of our clients are now a lot more sophisticated,” Mr McCormick said. “They’re professional people who realise there’s a benefit to working with someone who has a property back-ground.”

Companies with strong in-house skills have always been tempted to manage the property in house, cutting out the management fee.

This has sometimes led to other issues, primarily because man-aging property is not a core activity for the business. Legislation, particularly in relation to liability insurance, has had a strong deterrent effect on property owners interested in cutting out the property management cost.

It’s not just an issue for office buildings. There are significant legislation for retail outlets and all commercial premises to meet the occupational health and safety standards.

“There’s more onus on the owner to provide a safe work environment and some of these areas of legislation are quite grey,” Mr McCormick said. “If you don’t have a property manager the value of the property can be eroded. It’s simply prudent management.”

The volume of paperwork required to operate a safe commercial environment has driven the rise in property management business.

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