What are management services?
Management Services are the group of activities that must be carried out to administer real estate from the point of view of expenditure accounting, revenue collection and to provide services connected to the property itself.
These services, which range from maintenance and cleaning to concierge services and facility management, have a direct impact on both the costs incurred by the owner and tenants and also on the market value of the real estate. Therefore, they have a financial value in the same way as the strictly economic management of expenditure and income.
When it comes to managing large real estate assets, such as those held by banks, insurance companies, foundations and institutional investors, Management Services are of strategic importance and, in many cases, can make the difference between the success or failure of a real estate investment.
In fact, those who have decided to make a long-term investment by purchasing a large number of residential, industrial or commercial properties can only achieve good returns by careful management of every aspect. Investing in real estate is certainly a reasonably safe way to immobilise capital without facing the risks of the financial markets, but without good administration it can turn into a black hole that rapidly consumes financial resources.
With forty years of experience in the construction industry, AKNO has gained considerable skills in managing its real estate assets and puts them into service on behalf of other businesses through the work of the AKNO Management Services division.
Real estate financial management
Financial management of real estate is a complex task, in which you must combine skills from different disciplines so that they interact with each other to monitor all aspects of management. Every task must be carried out with due professionalism.
On one hand it is necessary to manage rent collection carefully, taking into account both the financial aspects and the human, psychological and economic issues that are often are significant causes of arrears. On the other hand, it is also necessary to have, for example, the skills to analyse the costs of structures and plan for their maintenance and renewal.
If we consider real estate costs, we can subdivide them into different categories, each of which deserves attention. First of all, we have the ongoing management costs for activities such as cleaning, plant operation and routine maintenance, which are predictable and constant over time. Secondly, we can also consider predictable fiscal expenses such as taxes, even if rates have often changed recently, especially at the level of local taxes. Although they do not follow a continuous trend, they do have clear due dates.
Finally, there is the cost of special maintenance work, the replacement or renewal of parts of the plant and the management of unexpected serious events that must be dealt with in a way that is, of course, unpredictable and often urgent. Although it is impossible to completely eliminate these types of expenses, which are certainly the most difficult to manage, it is also true that the frequency these events can be significantly reduced by properly-funded thorough routine maintenance.
Optimising management costs
When we talk about management costs, we often forget that they do not have a fixed value, nor are they separated from other factors, but they are a direct consequence of the design choices that were made during the construction or renovation of the building. Optimising management costs, then, does not mean acting on the criteria of a given situation, for example looking for the best price for heating fuel or the company that provides the lowest-cost cleaning services, but choosing to invest beforehand in buildings constructed with technical criteria that can effectively and permanently reduce costs.
Without doubt, one of the most interesting factors in reducing operating costs in the long term is the design of eco-sustainable buildings. Eco-sustainable architecture, in fact, is not only a design philosophy that aims to protect the natural environment, but also can have an extremely positive financial impact by optimising energy consumption.
AKNO Energy, our energy sustainability division, has completed some very interesting projects in this area. The first of these reduces heat exchange through the walls by using new generation insulating materials and thermal break windows which significantly reduces the cost of air conditioning and heating rooms.
In addition, the design of buildings with large skylights and glazed roofs is a key factor in reducing lighting costs, along with the adoption of automated systems for switching off lights in empty rooms. In the same way, generating energy on-site by using photovoltaic panels or biogas plants reduces the building’s energy requirements and so helps to reduce operating costs.
This type of intervention, however, has an installation cost which can be rather high and, naturally, requires careful financial planning to evaluate the benefits that, in our experience, are often significant.
Ancillary services management
Depending on the type of real estate being managed, there will be a various number of ancillary services. Good management of these services has the dual function of increasing the intrinsic value of an asset and simultaneously containing day-to-day management costs.
A concierge service in a residential property, for example, is certainly an element that increases the value of the apartments, justifying higher rents, but it is also a cost that must be carefully managed and optimised. Similarly, the surveillance service in an industrial or logistical zone, or the cleaning, maintenance or management services of a company fleet each have specific characteristics that require special skills in order to deliver them with optimal efficiency and cost.
This is why AKNO Management Services offer you a team of professionals who, with a great deal of experience in the sector, know how to make the most of the return on your real estate assets.