With Europe facing a massive challenge in the distressed property market this year, I know that strong and effective asset and property management has never been more vital to the property industry and to its investors.
Germany, in particular, which over the past five years experienced a Commercial Mortgage Backed Securities (CMBS) frenzy with a market now estimated at over €100 billion, is seeing declines in property value ranging from 30 per cent to 50 per cent and notes which rarely pay a dividend at maturity.
Daily, as an industry, we are witnessing the rapid erosion of property values due to lack lustre asset and property management and a negative rationale when loan covenants have been breached that says ‘sell it now for what you can get’. Not the way to preserve value or indeed to safeguard those who have invested.
This market calls for an approach which is fresh, different and above all seeks to analyse, stabilise and then enhance value. I believe it is time for a change in thinking, attitude and action.
At FI Real Estate Management, we recognised the potential for our services to this sector both in the UK and in Europe and geared up to make it a new focus for our business. As a result, we formed FI Real Estate Europe as our business platform in Germany and we are now one of the fastest growing asset/property management companies in Europe, winning more and more work from financial institutions and global investors.
These investors recognise that we treat their property as if it were our own, devoting time and resources to get to the root of their problems. Then we look at the upside – the future potential of the property – before we advise on a course of action which, for some investors, could result in no return. Frankly, to us, that has to be the very last resort.
I don’t accept this is ‘rocket science’ but know it is sound commercial sense. Wherever in the world you are operating.
Too many asset and property managers try to manage a portfolio from a spreadsheet in an office.
We get out and live it, know it and nurture it. We believe in protecting an asset and not rejecting it unless there is really no alternative and so often we find that there is and turn the situation around.
We have over 300 trained asset/property managers all over the UK and Europe who have that philosophy which is backed by 30 years of experience of hands-on management of property through recessions. So we have been there before in so many ways that count, making the difference between ‘success’ and ‘sale’.
If we can do this successfully, it begs the question ‘why isn’t this the norm?’.
Time for a big change in attitude to asset/property management in the European and UK property market? I think it is high time.
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