Demand rises for high-quality building managers
The headline read “Hangzhou nanny sets mansion on fire”, and the 2017 arson case in the capital of Zhejiang province has been a focus of attention on the Chinese mainland ever since. Investigations that followed the tragedy — in which a woman and her three children died — also cast the spotlight on the failings of the management of the 25-story building.
“The (property) industry on the mainland is moving so fast that the fundamental elements are not keeping up,” said Edmund Tong Wingho, a chartered surveyor in Hong Kong who also works as a property manager on the mainland.
One of those fundamentals is the need to implement and enforce safety standards, he said, adding that failure to do so has been a common problem in the mainland’s property management sector. He used safety protocols as an example, saying sometimes they are well set out, but are not enforced correctly.
Tong, who has worked in the industry for more than 20 years, also noted the need to maintain a hygienic environment in communal areas and ensure that repairs are tackled promptly, along with ground maintenance and landscaping work. These are all areas where the mainland’s property management industry needs to improve.
When it comes to emergencies, such as fires, Tong said effective property management involves the preparation of backup plans, so that if “Plan A” goes awry, a fallback can be deployed. Even the approach to dealing with residents’ complaints has to be taken to heart and must be internalized by all members of staff.
“Establishing a set of rules and guidelines is relatively easy. The hard part is implementation (especially with regard to fire safety issues),” he said.
Though arson was recorded as the cause of the fire in Hangzhou, which took firefighters two hours to bring under control, an official investigation found that firefighting facilities at the property did not meet standards. The inquiry also identified failures on the part of the property’s managers.
Moreover, according to Tong, basic measures such as enforcing daily inspection patrols and the correct training of fire-monitoring personnel had not been carried out.
The fire sent a tremor through China’s emerging middle class and prompted concerns about the quality of building management.
Tong believes the experience gained by property managers in Hong Kong may provide a solution because the city follows internationally accepted standards and procedures on everything from staff training to enforcement and monitoring protocols.
Eddie Hui Chi-man, associate head of the Department of Building and Real Estate at Hong Kong Polytechnic University, agreed with Tong. He noted that more than 70 percent of the population lives in high-rise apartment blocks, and the city has a relatively long history of commercial property management. As a result “Hong Kong has perProperty formed well and accumulated a lot of expertise”, he said.
Tong has applied some of the practices used in Hong Kong to his mainland company, China Resources Land Ltd in Shenzhen, Guangdong province. One of his priorities is the adoption of emergency procedures in the event of fire.
As general property manager, he insists that all staff members follow the procedures strictly.
Employees are required to know the exact location of fire extinguishers and how they work. They must also be fully aware of the procedures for orderly evacuation and how to check the list of occupants to ensure that no one has been left in the building.
Property management personnel also work around the clock in shifts.
Every month, Tong conducts surprise fire drills as a form of internal training to ensure that duty staff members know what to do in the event of fire.
He believes that unscheduled fire drills are an effective preparation for staff members, arguing that planned drills are more for “show”. He holds the drills in the early morning because that’s when most people are asleep, a factor that inevitably contributes to higher casualty numbers when fire breaks out.
In addition, Tong has visited the locations of many fires in Hong Kong.
“It’s really about saving lives by making the correct, timely responses before the first firefighters arrive on the scene,” he said.
In recent decades, the mainland’s property management sector has grown rapidly. Decades ago, the field was almost nonexistent, but last year, revenue exceeded 600 billion yuan ($89.5 billion), according to the China Property Management Institute in Beijing. The organization’s statistics cover 118,000 enterprises with more than 9 million staff members.
Despite the sector’s explosive growth, the development of services has been uneven, according to the organization.
That view was echoed by Ding Yu, a construction consultant in Lu’an city, Anhui province. “Property management in coastal cities is generally better than here (Lu’an),” he said.
He added that most property management companies in Lu’an operate on a small scale and undertake few management responsibilities: “They are almost invisible, except when they collect the administration fees every month.”
According to Ding, effective property management relies on welltrained employees and sufficient manpower to maintain quality and efficiency, which requires significant investment in staff and training.
He believes that many property management companies in small cities lack a sustainable business model because they are trying to survive by keeping costs low. That means they have little motivation to hire more staff members, or train them properly.
Statistics provided by the China Management Institute show that the industry is far from becoming integrated. The top 100 businesses in the sector account for about 30 percent of total revenues or areas managed.
However, changes are underway. In an article published by the institute, Shen Jianzhong, the president, warned that in the near future, the quality of services provided will be the key factor that determines whether property management companies thrive or fail.
Shen said the number of property management companies on the mainland ballooned “from zero to many” from the 1980s to the early 2000s, but as quality of service becomes a priority, there will be a shakeout, meaning the number of players will fall dramatically.
Hui, from Hong Kong Polytechnic University, agreed with Shen’s prediction.
“The market appetite for highquality management to match highend estates is rising,” he said, adding that Hong Kong companies and professionals will find their niche in the mainland’s booming high-end property management market.
Tong said the mainland will provide young people from Hong Kong with opportunities to climb the career ladder. He noted that the Guangdong-Hong Kong-Macao Greater Bay Area will be fertile ground for young people aspiring to join the property industry.
It aims to become the world’s foremost bay area and city cluster to lead the world in high-tech and industrial development, and international trade. Tong said he is certain that property management will 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 raise living standards.
Hui said there will be at least three approaches to reshaping the industry in the bay area: a rising number of property companies from the mainland will raise capital in Hong Kong’s financial market; having secured sufficient capital, they will expand, establishing scalability and better cost-effectiveness; and market competition will expand to cover not only prices, but also consumer awareness and company reputation.
From the government’s perspective, he expects cross-boundary communication and collaboration to concentrate on removing institutional obstacles to promote factors such as mutual recognition of related occupational qualifications or certificates.
Hong Kong’s universities could play a role, too. “In cooperation with partner entities in the Greater Bay Area and beyond, we could provide training in property management via short-term courses or even degree programs,” he said.
As people within the industry receive more professional training, and capital and policy support grow, Hui hopes the sector will embrace a new era that will ensure improved management and quality services. said Zhou Xinyi, president of the Chamberlain Institute, a training body for the real estate and property management industry in Shenzhen.
She used a vocational training program that opened in October at an education center as an example.
The project, operated by Zhou’s institute and offering distance education and degree courses, was commissioned by the China Property Management Institute and the Open University of China, she said.
Zhou added that the training platform has been structured to meet the industry’s demand for different levels of managers and employees, and said she is seeking cooperation with industrial and educational sectors overseas, including Hong Kong and Macao.
According to Chan, fierce rivalry for real estate asset managers will continue for some time, and the sustainability of commercial properties will largely depend on how the assets are managed.