Advice and Opinion

Reduced operating costs translate into higher rental income

Facilities management is rapidly emerging as an important factor which can play a major role in boosting the income stream of property assets, and so the outlook and potential for this sector of the property industry is positive, says Sulayman Abdullah, CEO of Excellerate Facilities Management, a member of Excellerate Property Services group of companies.

“By reducing operating costs, landlords have the potential to achieve a higher rental net income. In recent years, as with most business sectors, the property sector has been compelled to find new ways to optimise assets, namely, property investments. This is not only due to the prevailing extremely competitive market, but also due to a wiser and more competitive consumer. All stakeholders contain a tighter hold on costs, thereby driving innovation and ultimately resulting in buildings being run leaner and as cost effectively as possible. Property owners or landlords are beginning to come to terms with the fact that managing their facilities is more than a secondary function – it forms an essential part of their strategic, core business planning.”

Sulayman says now, more than ever, the integration of effective facilities management in the commercial property sector has an increasingly relevant role to play, not only in addressing operating costs but in regard to ‘green’ initiatives during both the construction and use phase of a building and incorporating energy saving features, waste recycling and minimising the use and pollution of water.

“Worldwide, facilities management has developed faster than almost any other discipline in the property industry. Where it can add significant value is in helping property owners and tenants eliminate wasteful and unnecessary practices which have a negative impact on the environment and also providing opportunities to achieve significant cost reductions over the medium to longer term for the asset and landlord.

“In South Africa, facilities management has slowly but surely become increasingly important in the highly competitive property sector. While the focus has always been to optimise building performance, this imperative has grown exponentially with the stresses on the rand, poor service delivery, an unstable power supply and a more demanding building consumer. We believe in coming years we will see building efficiency and optimisation taken to a new level as energy efficiency, waste reduction and greening drives and initiatives becoming implemented as a norm, rather than an exception.”

He says an integrated approach is adopted to manage facilities in line with prime property management objectives such as leasing, rental collection, tenant liaison and general administration. These are described as ‘hard and soft services’. Hard services are those elements that form physical parts of the building such as the structure itself, exterior and interior finishes, plumbing, mechanical and electrical installations, office installations, maintenance and refurbishments, while the soft services focus on issues such as security, cleaning, pest control, hygiene and landscaping services. In some instances, facilities management services can be extended to incorporate additional services such as fleet, mail and cafeteria management.

Adds Sulayman: “As an industry profession, facilities management (FM) is still in its infancy, however, growth has been experienced where landlords have reached the realisation that experience brought by a specialist FM services provider allows them to focus on their core business. Recently, FM has certainly received more attention in the constant drive for efficiency, effectiveness and optimal building performance. Acceptance that the management of their facilities is best placed in the hands of FM professionals is becoming a reality as the value of the skills, services and experience a specialist FM provider can bring is being recognised.”