DTZ, which manages the Prosta Office Center in Warsaw, is finding tenants more demanding and competition fiercer Courtesy of DTZ

Property managers operating in Poland have endured a turbulent year. While the sector remains stable overall, the lack of new purchase transactions, the freezing of new developments, decreased demand for commercial space and increases in property maintenance costs have all scarred the industry.

“Property management is facing new challenges caused by a lack of new space as well as increased building maintenance costs,” Michał Skaliński, director of the asset management department at Cushman & Wakefield Polska, said, citing other problems as well.

Demanding clients

According to Mr Skaliński, this situation has increased tenants’ expectations as far as costs and the quality of service offered are concerned. “A property manager is more closely watched by tenants in a time of crisis, in terms of costs resulting from property maintenance. He thus has an opportunity to show his professionalism by keeping the costs within reasonable limits and strengthening his relations with tenants,” he said.

Grzegorz Dudziak, managing director of DTZ Management Polska, concurred. He stressed that property owners’ expectations regarding the quality of management services have also increased. There is now much greater emphasis put on property manager-tenant cooperation and effective collection of tenants’ debts in order to maintain the financial liquidity of properties under management.

C&W’s Skaliński pointed out that the scope of property managers’ work has increased in that they now have to cooperate with leasing agents. “If the space is vacant, even the best-performed property management work receives only mediocre recognition from the property owner.”

Fierce competition

Intensified competition is characteristic of the current situation in the segment, experts say. “Some firms are spoiling the property management market by offering prices that, by all appearances, amount to dumping,” said DTZ’s Mr Dudziak.

Tomasz Kwiatkowski, sales and marketing director at Hochtief Facility Management Polska, added that it is now common for companies to employ workers who are under-qualified and inexperienced in the area of technical maintenance.

“This results in frequent changes in personnel and a focus on current repairs. Thinking [to the future], one should concentrate on ‘preventive and predictive’ maintenance, which guarantees that the property will be well-maintained in the long-term perspective,” Mr Kwiatkowski told WBJ.

A stable market

According to Mr Dudziak, no revolutionary changes in the property management segment are expected in the near future, since it is one of the most stable areas in the real estate market. He said that the dominant trends in property management involve the drive to deliver better quality and to offer asset management services that help increase the value of the property.

Mr Kwiatkowski of Hochtief Facility Management said that now is the time to outsource services and renegotiate contracts, as well as to concentrate on synergy effects created by the servicing of a number of buildings in the same location.

“A sizable portion of the market sees its [future] success in this kind of approach, so I predict that the facility management market as a whole is in for a number of years of growth,” he said.