Property Management

Author: Zhu Aihua et al. / Country:
Publisher:
Publishing Date: 2002-07-01
Features: Property has inherent attributes as a commodity in a special sense. Moreover, the commercial nature of property can only be fully realized after it is integrated into the market track. The gradual improvement of the market economy provides necessary development space for the cultivation of the property market. Therefore, the property market has become a place for the exchange of property as a commodity, or from a broader perspective, the sum of all exchange relationships related to property. The so-called property management refers to the management activities under the property market. Due to the characteristics of property and the ever-changing nature of the market, the property market exhibits several fundamental features.
① Imperfection of the property market. The property market cannot be fully liberalized, primarily due to the constraints of various factors such as the scarcity of land resources, national macro policies, and government operational behaviors. Additionally, local urban planning restrictions prevent property ownership (state-owned) from entering the property market. Under such conditions, the property market is not fully free of competition, which is also the key distinction from other general commodity markets.
② Regional nature of the property market. This feature aligns with the regional characteristics of property. Since property cannot move freely like other commodities but is fixed within a certain spatial range, the market formed around property naturally remains confined to a fixed region. At the same time, the regional nature of the property market reflects the supply-demand relationships and price levels of property in different regions, further highlighting the socio-economic development status of the area where the property is located.
③ Comprehensive nature of the property market. The property market is a multi-faceted, multi-tiered, and multi-form market system. Based on different criteria, it can be divided into many types. According to the hierarchy of market activities, it can be classified as: primary market (between the state, which owns property rights, and operators who obtain usage rights for compensation), secondary market (between operators and consumers due to the transfer of usage rights), and tertiary market (among consumers due to the mutual transfer of usage rights). According to the elements of market composition, it can be divided into real estate, residential property, labor, information, and other markets. These different property markets collectively constitute a unified and complete property market.
④ Professional nature of the property market. Professionalism refers to the requirement that market participants in the property field must possess relevant expertise in the field, including strengthening legal awareness and mastering necessary operational skills. As the property market gradually matures, the awareness that "property is a commodity" has become deeply ingrained, and the concept of "property operation" has been reinforced. Under the market's drive, investment trends are beginning to emerge. Taking Beijing, the capital city, as an example, the following types of property will primarily be involved in the New Century Property Investment:
① Small units. Small units refer to housing with sizes maintained in the medium and small unit types. They are favored by investors due to their low investment and flexible tenant base, making them a hot commodity type.
② Second-hand properties. The simplification of transaction procedures will make previously sold public housing and affordable housing more active in the market. The low purchase price of these properties creates significant appreciation potential, offering investors ample room for operation. Meanwhile, the liberalization of appraisals has made the prices of these properties more market-oriented. As long as investors can identify the gap between price and value, they can quickly benefit from their insights.
③ Pure investment properties. The emerging investment trend has led to a batch of properties with a pure investment concept: hotel-style apartments offering standard room types, service-style apartments adopting hotel management, and vacation homes located near scenic spots, targeting tourists as tenants. In the 21st century, such investment concepts in Beijing will mature. For example, in aspects such as post-management, operational methods, and property rights forms, investors will be provided with safer and more feasible models. Creative models similar to TIME SHARE, such as purchasing only 1% of the property rights to reduce risk, will also be introduced to the market.
④ Service-supported properties. As hardware standards become closer, post-construction property management will become a crucial factor in determining the success of investment projects. Professional management personnel's maintenance of the property and creation of a community atmosphere will play a significant role in effectively attracting and gathering residents.
⑤ Off-plan properties. As experienced investors grow in number, the speculation of off-plan properties will thrive. With market regulation and mastery of investment techniques, more investors will be willing to try their hand at this "short-term operation" in real estate.
⑥ Olympic concept. The Olympic concept is undoubtedly one of the most prominent investment topics of the new century. If the past uncertainty over the bid for the Olympics had made the appreciation potential of investments unpredictable, China's successful bid has now provided investors with a guaranteed opportunity to profit from the Olympic concept in Beijing.
⑦ High-value-for-money properties in the southern city. Compared to the overpriced and already losing appreciation potential properties in the eastern and northern cities, the properties in Beijing's southern city undoubtedly offer greater room for growth. In the 21st century, balanced urban development is the trend, and the gap in the southern city will eventually narrow. The current revitalization of the real estate market in the southern city is a sign of this trend.
⑧ Potential area projects. Well-known commercial districts and mature large communities have already played the leading role in the investment market. In the 21st century, the areas surrounding these "hot spots" will take the lead. Leveraging their current popularity, new projects in these areas will compete with the established properties by offering lower prices and innovative designs to capture the investment advantages of the older properties. Development zones such as Zhongguancun Science and Technology Zone and Changping High-Tech Park will attract large numbers of urban residents through high technology.
Property management, as a sunrise industry, has attracted widespread attention from all sectors of society. However, at present, many property management units in China are established by real estate developers or property management departments, with rigid mechanisms and outdated operational concepts, exposing numerous issues.
1. Unclear property rights and inefficient mechanisms. Autonomous property management companies invested by developers or property management departments are similar to after-sales service units of these entities. Although they are nominally independent enterprises, their human resources, financial resources, and material resources are controlled by parent companies. Property management companies adopt a mindset of "relying on the big tree for shade," bearing profits but not losses, with operators primarily responsible to superiors. Due to inflexible mechanisms and outdated concepts, operators lack motivation, employees enjoy a "big pot" system, and the degree of market-oriented operation is low. This phenomenon is known as the "blood relationship" in property management. As a result of the "blood relationship" between property developers and property management companies, owners frequently file complaints and disputes regarding property management, which are often difficult to resolve in practice. In Nanning, Guangxi, for example, the purchase contract clearly stated that advanced elevators produced by the Japanese joint venture company Guangri would be installed in the building. However, after the owners moved in, they discovered that elevators from another manufacturer had been installed. The elevators soon became "paralyzed." Later, the property management company and the developer shifted responsibility, leaving the issue unresolved to this day. The reason is that both the property management company and the property development company are subsidiaries of the same listed company, leading to the property management company being unable to conduct strict inspections of supporting facilities when managing commercial housing, resulting in lingering issues. Currently, Guangxi has more than 280 property management companies with nearly 10,000 employees, expanding their management scope from original residential communities to government agencies and enterprises. However, it is reported that most of these property management companies have a "blood relationship" with real estate developers. Even in cities with relatively developed property management, such as Shenzhen, Guangzhou, Shanghai, and Beijing, the same problem persists, with most communities having property management directly operated by developers. This leads to issues where the after-effects of commercial housing development are easily carried over to property management. At the same time, some management companies, relying on their "blood relationship" with developers, are not concerned about financial shortages and lack motivation to improve service levels. Additionally, the lack of corresponding management regulations greatly limits the professionalization, socialization, and market-oriented operation of property management. Industry insiders suggest that China's entry into the WTO will first impact property management. They recommend that the government actively guide and strengthen efforts to promote open bidding systems in property management. Owners should not only select high-quality and low-cost management companies but also regulate the qualifications, procedures, and composition of bidding personnel to maximize the transformation of the "blood relationship" between most real estate developers and property management companies in China. It is reported that after the incident, the Nanning Real Estate Administration Bureau issued a notice prohibiting real estate developers from operating property management businesses. Additionally, the Guangzhou Real Estate Administration Bureau introduced the "Property Management Qualification Assessment Measures," significantly raising the standards for first-tier qualification companies, forcing property management companies to expand their scale and improve service levels, one of the goals being to break this "blood relationship" and ensure fair and just competition between developers and property management companies.
2. Limited assets and low potential for appreciation. Property management companies differ from industrial enterprises, which have complete equipment, factories, and mature products, and from general commercial enterprises, which have relatively ample funds for turnover and profit margins from buying and selling. Property management companies provide services and generally have few assets, with some property management units comprising only "a few tables and guns." Due to the lack of high-quality assets available for liquidation and the limited property management service fees, the potential for corporate growth is not significant. As a service industry, its tangible value is minimal, with more emphasis on intangible value, and brand is the most important intangible asset of a property management company. To establish a high-quality brand for a property management company, it is essential to strengthen corporate culture. When property management companies accept a contract to implement property management, their initial capital and working capital are relatively insignificant compared to other industries. Due to the low requirements for technology, capital, and human resources, the entry barriers for the property management market are low. In the context of the market economy, property management companies face increasingly fierce competition. On one hand, similar companies emerge like mushrooms after rain, but due to the labor-intensive and low-profit nature of the industry, property management companies will inevitably face reorganization, resource reallocation, and a trend toward scale and intensive operations. On the other hand, as people's living standards gradually improve, their demands for working, living, and residential environments also increase, leading to higher expectations for their supporting services—property management. For property management companies, as almost all recognize the importance of improving service quality, the homogenization of property management services is becoming increasingly evident. If property management companies want to differentiate themselves from competitors through traditional means such as technology, quality, price, and service, it will become even more difficult. Under such circumstances, property management companies with good brands and public images will inevitably gain a competitive advantage in the fierce market, seize market share first, and expand the pie. Strong brands possess core consumer groups and powerful radiation capabilities. The importance of brands is not limited to the market but also as a key element in business operations, playing an irreplaceable role in maintaining corporate cohesion. It can be said that behind corporate competition lies the brand, and the support for the brand is corporate culture. Winning consumer and public recognition and affinity for brands through the cultural power of brands has become a deep, high-level, and intelligent form of competition in today's market, a point that is particularly evident in the property management industry. Brands are not products but the cultural emotional atmosphere and service concepts they embody. Only brands that conform to market laws and occupy cultural high ground can establish a good brand image, create high reputation, gain consumer favor, and public trust, and thus gain an advantage in market competition. It can be said that any property management company that wants to remain invincible in market competition must, as a business manager, view the brand from a strategic perspective.