Property Management in Cambodia
Property management is becoming increasingly important for Cambodia’s fast-growing serviced apartment and condominium sector. Effective property management plays a critical role in maximizing the life, assets and the all-around aesthetics of a building. In addition, delivery of building services is now playing a significant role in attracting and retaining tenants, as complexes search for a point of difference in a market rapidly growing in supply.
From commercial buildings to single properties to large serviced apartment/condominium buildings, the property management sector is currently a mix of owner-managed properties delivering minimal services on a budget, to professional companies providing “full services” with varying success. Professional property management is a relatively new concept in Cambodia, however, this is starting to change. Given the number of new commercials, apartment and condominium complexes being built in Cambodia, it’s a good time to analyze the property management sector.
Property Management for both small and large residential apartment complexes has traditionally been the home of “family management”. Many complex owners are currently unwilling to pay the required fees for a professional management company with experienced staff, instead settling for cheaper options, often hiring family members with limited capabilities. This underskilled labour more often than not delivers services that leave a lot to be desired. This style is slowly changing as owners begin to see the value of quality property management in retaining tenants in an increasingly competitive market. Customer service is extremely important, when an air-conditioner breaks in April it doesn’t take long for tenants to start complaining loudly if communication is not sufficient and repairs are not carried out quickly. It’s small issues which can often be the deciding factor for a tenant to extend their contract or move on.
Managing a condominium complex can be an enormous undertaking in any market and the property management sector for condominiums here in Cambodia is firmly in its infancy. With Condominiums come the concept of sinking funds, body corporates and monthly management fees and condominium legal services. Currently, there are only a few condominium complexes online but we have already seen a number of international service providers struggle to implement & manage the required services. There are a number of challenges which need to be looked at; firstly, there are a lot of information gaps amongst the staff delivering these services. More time will need to be spent training staff on how to implement and deliver building policies and procedures. Secondly, condominium owners need to understand and follow through on their responsibilities. When items such and common area electricity, common area water and management fees don’t get paid, the building and its facilities can fall into disrepair quite quickly.
With the sheer volume of condos coming onto the market in the next 24 months, it will be interesting to see who is capable of delivering property management services for condominiums. As things stand, quality property management in this sector is hard to come by.
THE COMMERCIAL SECTOR
In the commercial sector, more international corporations are setting up offices in Cambodia, and often, as part of their lease, require professional property management services to be delivered in their chosen office building. Large corporations will take a 5-10 year lease and fit-out costs for a large office can easily exceed USD$1M. Given the commitment and size of the investment by these companies, it’s not surprising that they are concerned about who is managing their building – it poses a legitimate risk. In the last quarter, IPS was engaged by 3 large commercial buildings to provide and implement building set up documentation including, tenant handbooks, fit-out guidelines, building rules & regulations, standard operating procedures and emergency procedures. We expect this trend to continue as owners acknowledge their tenant’s requirements and the limitations in what they can deliver through traditional “family management”.
The future of property management in Cambodia will be interesting to watch unfold. Buildings that choose to ignore the importance of property management in managing and maintaining their building, and attracting/retaining tenants will do so to their own detriment. I believe there will be a shift away from “family management” as owners will be pushed into engaging professional management services in order to meet the needs of the market and its tenants.