As a portfolio manager in charge of multiple buildings for a profitable return on behalf of your clients, you are trying to
- stay ahead of legislation,
- mitigate risk,
- foresee any future complications,
- maintain and ideally increase assets value,
whilst ensuring that the buildings themselves are occupied and rent income is being paid on time.
Enhancing the performance of the property portfolio you are managing is always your top priority so that you can prove to your clients that you are satisfying their objectives. In turn they keep you in business.
Before you can enhance something though, you must have a clear picture of where you are starting from and what enhanced performance actually looks like. Think of the task as a journey. Here we give you 5 stages to enhancing property portfolio performance.
Stage 1 to enhancing property portfolio performance: Benchmark today’s situation
Before you set your destination and road map your journey, you need to figure out where you are. The questions you ought to ask about your property portfolio performance are:
- What information should I have?
- What information do I currently have?
- Is it accurate?
- How old is it?
- Who collected it and how did they do this?
Get a true picture of today before you try and describe tomorrow.
You may be stuck at this early stage, with very little data at your finger tips, out-of-date data, or data coming from an unreliable or unknown source. If this is the case, you will have to stall your planned course of action on the buildings to fulfill that data collection stage. You may be interested to read our recent post about exploiting your assets big data.
What is the fastest and most cost effective way to benchmark your commercial buildings? Traditional surveyors offer one solution, there is a supply chain out there pushing their own products and there are technological solutions offering everything from desktop reviews to in-depth reporting, simulation and analysis. Your choice will depend on your time available, your budget and your requirements.
A word of warning which applies whatever you decide to do: Do not proceed to Stage 2 without completed this Stage 1.
Stage 2 to enhancing property portfolio performance: Decide on the improvements required
Assuming you are now in possession of accurate data, you need to establish which improvements yield the best return on investment for your client. Ask questions such as
- Which building(s)?
- Which solution?
- In what order?
It does sound easy but impartial advice is difficult to come by and not all solutions will deliver upon their promises. Software can rank and rate savings and costs but none can get the tenants on board, keep building control happy and understand the nuances of each challenge you are aware of personally. It is best to take the output and augment it with your own knowledge of the buildings and strike a line through the ones you know just won’t get traction with your client or tenant.
Stage 3 to enhancing property portfolio performance: Plan and communicate to client
The next stage on your journey is to establish a costed refurbishment schedule with a known ROI. Show and discuss your plans to your client. Clients all want the same thing: a healthy portfolio, appreciating in value, filled with happy tenants who pay their rent on time. Anything else is an inconvenience, isn’t it? In our experience, clients also want something a little more: they want to know their money is being spent in the right direction, that we are helping them mitigate risk and optimise their budget.
Of course they will be mightily impressed and may write a blank cheque to enable the solutions. This is more likely to happen when you provide them with clear and justified figures. Hence the importance of not missing steps 1 and 2.
Stage 4 to enhancing property portfolio performance: Compare quotes and do your due diligence
This stage implies you have agnostic advice to hand.
Did you go to market to a flat roofing company for example, who recommended you replace your roofs? Or an HVAC company who recommended you replace 50% of the heating systems? Impartial advice is a critical step in this process. You will have to pay for it, but in the long run it pays for itself tenfold and allows you to proceed with confidence in the outcome.
You may have your preferred suppliers either formally listed in your company’s purchase framework or whom you have used before and trust. Alternatively, you may also be looking for new suppliers who might have more fitting solutions or use newer technology. Make sure you get clear and detailed quotes, ask questions and do your research for due diligence.
Stage 5 to enhancing property portfolio performance: Manage the refurbishment work
If you have followed steps 1 to 4, you should be relatively safe in the knowledge you are delivering best value to your client. It is of course easier said than done. You will need to regularly communicate and hold progress meetings with your appointed suppliers and keep them on their toes. Don’t accept in blind faith what they tell you.
For good measure we will add a 6th stage to your journey: Audit your actions. You need to measure performance to ensure you have reached your destination.
Are you ready to go on your property portfolio enhancement journey? Looking for impartial advice to increase the value of your buildings portfolio? Stuck at Stage 1 with little, unreliable or out-of-date data? If you answer YES to any or all of these questions, then please contact us today to discuss your project, by clicking on the button below.
Register today for our webinar The Future of Building Asset Management taking place on Friday 30 September 2016 at 1pm. Click on the button below for more details.