China Daily (Hong Kong)

Filling the gap in high-standard livability

- Implementa­tion is the key Industry consolidat­ion Opportunit­ies in Bay Area Contact the writer at wangfeng@chinadaily­hk.com

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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.

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PHOTOS PROVIDED TO CHINA DAILY
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Edmund Tong Wing-ho,
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