Filling the gap in high-standard livability
r B
The headline read, “Hangzhou Nanny Sets Mansion on Fire.” The arson case has become a focus of attention on the Chinese mainland ever since. Enquiries that followed the tragedy in 2017 also cast a spotlight on the quality of property management.
“The industry on the mainland is moving so fast that the fundamental elements are not keeping up,” said Edmund Tong Wing-ho, a Hong Kong chartered-surveyor-turned property manager.
One of the fundamentals he cites is the need for enforcing safety standards — not just putting them on paper but implementing them. Indeed, this has been one of the common failures of property management. Tong took fire safety protocols as an example, saying sometimes they are well set out but not implemented.
Tong, who has more than 20 years in the industry, also cites maintaining a hygienic environment in common areas, keeping up with repair work, ground maintenance and landscaping — all areas where the mainland’s property management industry needs improvement.
When it comes to emergencies, such as a fire, Tong explained that effective property management prepares back-up plans. If “Plan A” goes awry, then there is a fallback plan to deploy. Even the approach to deal with residents’ complaints has to be taken to heart and internalized by all staff members.
“Setting up a set of rules and guidelines is relatively easy,” Tong said, “the harder part is implementation”, especially on fire safety issues.
A young mother and her three children died on their 18th floor residence in that Hangzhou fire, in June 2017. It took two hours for firefighters to bring the blaze under control in the luxury high-rise building.
Although arson was the cause of the fire, an official investigation found that firefighting facilities on the property failed to meet the standard. The inquiry also identified failures on the part of property managers.
Such basic measures as enforcing daily inspection patrols and proper training of fire monitoring personnel had not been carried out, Tong commented.
The fire sent a scare through China’s emerging middle class and set off alarms about the quality of building management.
Tong believes industry experience in Hong Kong property management may provide a solution. Hong Kong follows internationally accepted standards and procedures on everything, from training of staff, to enforcement and monitoring protocols.
Professor Eddie Hui Chi-man, associate head of the Department of Building and Real Estate at the Hong Kong Polytechnic University, agreed. With more than 70 percent of its population living in high-rise apartment blocks and a longer history in building management, “Hong Kong has performed well and accumulated a lot of expertise”.
Tong applies some of the practices in Hong Kong to his company at Shenzhen, Guangdong province. One of his priorities is fire emergency procedures.
Tong, who is the property general manager for China Resources Land, demands that every staff member, managers included, follow procedures strictly. Staff are required to know exactly where fire extinguishers are located, how fire extinguishers operate, procedures for an orderly evacuation and check occupants list to establish that everyone has gotten out safely in case of an emergency.
He directs surprise fire drills every month as a form of internal training to make sure duty staff know what to do if there is a fire.
There are property management personnel at work around the clock. He reckoned that unannounced fire drills are effective for preparing staff, saying that scheduled fire drills might serve more for “show”.
He chooses the early morning hours for drilling. That’s when most people are asleep, a factor that inevitably contributes to higher casualties when fires break out.
He had visited locations after fires in Hong Kong. “It’s really saving lives to make correct and timely responses in the first place before the first fire brigades arrive on the scene,” he noted.
In the past decades, the property management industry on the Chinese mainland has grown rapidly. At the beginning, property management was almost nonexistent. Today, annual revenues in 2018 exceeded 600 billion yuan ($88 billion), according to the China Property Management Institute. The Beijingbased organization’s statistics cover 118,000 enterprises with more than 9 million staff.
Despite the explosive growth in the sector, the development of services has been uneven, the organization noted.
“Property management in coastal cities is generally better than in here,” said Ding Yu, a construction consultant in Lu’an city, Anhui province.
He said that most property management companies in Lu’an operate on a smaller scale and hardly carry out management responsibilities. “They are almost invisible, except when they collect administration fees every month”, said Ding.
Property management demands well-trained staff and sufficient manpower to maintain quality and efficiency. It means a significant investment in staff and staff training, he said. He thinks the property management companies in small cities lack a sustainable economic model. They are trying to survive by keeping costs low. There is no motivation for them to hire more staff and have them properly trained.
Statistics of China Property Management Institute also show that the industry is far from becoming integrated. The top 100 enterprises in the sector account for about 30 percent of total revenues or areas managed.
Changes are underway. Shen Jianzhong, president of the industry association, wrote in an article published by the organization that in the near future, quality of services will be the key factor determining whether property management companies thrive or fail.
To map out the progression of the industry, Shen said in the article that property management companies ballooned “from zero to many” through the early decades. As services quality becomes a priority, Shen wrote, there will be a shakeout, meaning the industry will go from “many to fewer” players.
Professor Hui from PolyU sees a similar trend in the mainland’s property management industry. “The market appetite for high quality management to match high-end estates is increasing,” he said. He believes the booming high-end property management market on the mainland is where Hong Kong companies and professionals will find their niche.
Tong sees opportunities on the mainland for Hong Kong young people to climb the career ladder. He notes that the Guangdong-Hong Kong-Macao Greater Bay Area should be fertile ground for young people aspiring to join the industry.
The Bay Area aims to become the world’s foremost bay area and city cluster, topping the world in hightech and industrial development and international trade. Tong said he is certain that property management is bound to play an important role in the development of the Bay Area’s 11 member cities, as they modernize and pursue a sustainable development strategy to improve people’s standards of living.
Hui said there will be at least three approaches to reshape the industry in the Bay Area.
From the monetary perspective, more and more property companies from the mainland will raise capital in Hong Kong’s financial market. With sufficient capital, they will expand, establishing scalability and better cost-effectiveness. Market competition will also expand to cover not only prices, but also consumer awareness and reputation of the companies, Hui said.
From the government’s aspect, Hui says cross-boundary communication and collaborations are likely to concentrate on removing institutional obstacles. He mentioned mutual recognition of related occupational qualifications or certificates, as one example.
Hong Kong’s universities could play a role, too.
“In cooperation with partner entities in the Bay Area and beyond, we could provide training in short-term courses or even degree programs in property management,” he said.
As the industry gets more professional training for its staff, more capital and more policy support, Hui hopes the property management industry will embrace its new era and bring improved management and quality services in the future.