Are your assets working to their full potential?

An asset training plan will drive a competitive advantage for assets that can tangibly demonstrate better sustainability, lower service charge and better tenant services.

As the Asian market begins to recover from the global financial crisis, there has never been a greater need for fund managers to differentiate fund performance and develop a ‘best in class’ reputation to attract and retain quality tenants.

The key to driving improved fund performance is a greater emphasis on benchmarking current and target asset performance. This information will drive a competitive advantage for those assets that can tangibly demonstrate to tenants that they offer better sustainability, lower service charge and better tenant services.

Each property portfolio or asset has unfulfilled potential. With an asset training plan, fund managers will be able to improve their brand and differentiate from their competitors.

Go green
Sustainability is already largely entrenched in the US and Europe, where many government buildings must be energy certified. Asia will eventually follow and adopt similar sustainability legislation, however tenants are already starting to differentiate against poorly performing sustainability assets.

Clear information on a portfolio’s sustainability performance can keep a manager ahead of their competitors and help them make informed decisions about the longer term viability of an asset. The evaluation process will often identify ‘quick wins’ that allow them to make big energy savings from small actions such as automatic temperature controls and voltage regulation.

Reduce service charges
In reviewing service charges, an asset training plan can help identify quantifiable service charge data that can be benchmarked against similar assets, then challenged with a close review of service level and procurement efficiencies. Once the ‘best in class’ service charge is identified, this can be compared against the remaining portfolio to achieve more savings.

The first step to reducing any service charge is to create an asset register. This is an indispensible list of components of a building that will drive the planned preventative maintenance plan and life cycle plan. With the right advice, fund managers can achieve 20% reduction on service charge with minimum effort.

Look for additional revenue
Currently, revenues from assets are only comparable through rental charges. However to ensure the asset is reaching its full potential, non rental incomes should be targeted and benchmarked.

Fund managers may also consider a technical review of the asset to improve aspects such as the layout of common areas and to make space available for other revenues (e.g. cafes/ATM). For example, other areas such as the roof may be utilised to accommodate a roof garden or a food outlet.

Take control of your asset
Once the asset training plan has highlighted areas of portfolio performance improvement, the best way to take control of the performance of your assets is to contract the delivery of target improvements to third parties. Property managers, on behalf of investors and fund managers, are best placed to implement the recommendations.

This will then lead to a more open and transparent benchmarking of property manager performance in delivering the required targets.

Other benefits include higher tenant satisfaction and a significant increase in net asset value. Providing tenants with extra services, (such as retail merchants, entertainment, cafes etc), ensures they operate more efficiently and creates new revenue streams for the asset owner.

Richard Marriott
Partner
EC Harris

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