As the real estate market in Thailand evolves, demand for professional property management services in the country has been rising rapidly, according to international property services firm JLL.
Besides a greater number of property developments, the increased awareness of property owners and investors regarding the necessity to secure professional management of their properties is a major factor that has driven this demand.
"After a long learning period, many property owners realised that developing a property is one specialty, while managing that asset is another. Property management is more than just housekeeping and security work. There is plenty of evidence that without professional property management, real estate assets can significantly lose competitiveness no matter how well they were built," says Suphin Mechuchep, managing director of JLL.
In the Bangkok office sector, the total stock of existing supply is more than 8.5 million square metres. JLL estimated that nearly 60% of the office buildings in Bangkok are currently managed by service providers, compared to 30% estimated for 2010.
In the condominium sector, there are more than 420,000 completed units in the capital. Most of these developments are managed by service providers.
Dexter Norville, director of property and asset management at JLL, said a changing trend contributed to the shift.
"Within the first year or two of a new condominium development completing, the property manager is typically appointed by the project developer that may have an in-house property management arm serving its customers. In subsequent years, the selection of a property management provider is nearly always handled by the development's juristic person. This has contributed to the growth in demand for property management by independent service providers."
While the most important driver of growth is the increasing need for owners and investors to protect and enhance the value of their assets, other factors also come into play.
First, property owners need to enhance the efficiencies of their real estate. While there is constant pressure on them to minimise operating costs, tenants and residents are demanding better building services.
Furthermore, as the building and construction industry evolves, new property developments in Thailand have been built and equipped with far more complicated technologies, compared to a decade ago.
These modern property developments typically require more complicated technical support and maintenance, and in many cases, need technology transfer and best practices from more developed real estate markets.
Due to the same reason, a higher level of property management offering more sophisticated technical and engineering support is needed.
Third, as the industry is going green, property owners need to rely on the know-how from an experienced international property management firm that can help them achieve sustainable solutions through an integrated approach to environmental sustainability management across the asset life cycle.
As well, a property is an asset that is exposed to risks. Only a qualified property and asset management firm with a team of experienced professionals can offer property owners with holistic site-specific risk processes to minimise those risks.
Due to these reasons, JLL foresaw more property owners outsource property management functions to independent service providers.
As the country's real estate market has become more mature, the firm also expects the growth of demand for professional property management to be more apparent.