Property Management of a Company Headquarters Building, Dubai Case Study

Introduction

Managing rental property is not an easy task. One requires a combination of management and organizational skills to manage a property in a profitable and effective manner. The property’s profitability is highly dependent on the professionalism of the manager, as well as a realistic and well designed plan. It reveals the role of management in any business.

As Deakin (2004) explains, “property management indicates a need to be cared for, monitored and accountability given for its usable life and condition”. It is also the management of the physical assets, maintain the buildings’ deliverables and tooling.

Being able to calculating cash flow is of paramount importance for a profitable management of a rental property. However, Deakin (2004) explains that being able to manage tenants is the most important part of rental property management.

Other factors that need to be addressed include advertising vacant space, interviewing prospective tenants, obtaining fire, liability and other insurance on the property, arranging for regular repairs and maintenance activities, conducting regular inspection and having an organized rental payment system.

The global economic crisis in 2008 proved just vulnerable the real estate can be. Many buildings had their rates affected because of valuation. According to Estates Dubai (2011), “the real estate owners of both private and corporate properties are awaiting for the property valuation results of firms to match “pre-crash valuations”. The situation is slowly expected to improve and investors in Dubai are hoping to get better valuations.

Property owners are hopeful that things will slowly stabilize and go back to normal not long from now. As explained further by Estates Dubai (2011), “owners of properties are of the belief that the real estate market has recovered considerably and so, it is time to see whether the value of their holdings have gone back to what they were worth before onset of the economic crisis in 2008”.

These kinds of challenges prove the need for a well designed property management plan, capable of addressing such uncertainties when they arise. “The process involves, systems and manpower required to manage the life cycle of all acquired property including acquisition, control, accountability, responsibility, maintenance, utilization, and disposition” (Deakin, 2004).

Background of the case study

“X” Company bought a building in the Dubai Health Care City from Dubai Properties via Dubai Holding. The building was bought in a “shell and core” condition meaning that it was sold without the finishing part that is carried out in most constructed buildings. Therefore, “X” Company had to spend extra money on the building finishes and fit out.

“X” Company has been able to transform its office building into a very luxurious building with the most expensive fit out and furniture that has ever been used by any of the government entities whether in Dubai or in any of the other Emirates.

The building fit out and finishes were chosen carefully to match those found at Google’s headquarter. Not to mention the custom-made designer furniture that was especially ordered for the building from Italy.

The building was primarily bought to be “X” Company’s Headquarter and to embrace all sister entities of the Office. It was handed over to TEO on June 2010 during the period of the global economic crisis. After which a sudden decision has been made by the top management to convert the building to a commercial building instead and to start renting it to other entities whether government or private.

The problem faced by “X” Company (the Landlord) was that the way the building was built which was mainly intended for the occupancy of a single entity. For instance, some of the floors were divided into 3 to 4 separate office units that share the same reception area, the same pantry and washrooms.

In addition to that, there are a few meeting rooms on the floor that are also designed to be shared between the office units. Within a short period after the handover of the building, “X” Company managed to bring in two entities to occupy a space within the building. One of the entities leased an office unit on the 3^rd floor and the other one leased a unit on the 4^th floor.

The reason why I chose this case study is that I have been mainly involved in the process and in almost most of the decisions that were made in relation to the building. I’m the Head of Operations at “X” Company and I handle all business support related tasks one of which is the management of “X” Company properties.

It has been a great challenge for us to handle the building after its handover and the decisions we had to make to have the building running. Not to mention the challenge we faced after the decision to convert it into a commercial building where it was mainly designed for the occupancy of a single entity in the first place.

As mentioned earlier the building cost “X” Company a fortune to make it the way it is now, therefore, it was necessary for the team managing it to maintain the quality of the building and to market the building as one of the unique buildings available for rent for commercial tenants.

In addition, Property Management is a headache. Given the aforementioned reasons, it is for “X” Company’s betterment to hire a specialized company to manage and run the building on its behalf.

With such an arrangement in place, “X” Company can be relieved from the headaches that come with managing the building by itself. Not to mention that it is imperative for “X” Company to find a way to have the building occupied by leasing most of its floors in an effort to recover its operational costs at lease.

As the Head of Operations at “X” Company and being the one responsible to handle all building related issues, it’s been a great opportunity for me as a manager to explore other fields of management such as the field of Property Management. I gained the experience and the skill required to run future buildings not to mention the challenge we faced acting as a landlord for the first time.

The building is operational and is properly managed by the Property Management Company. However, only around 30% of occupancy has been achieved until now due to the economic crisis that affected the property market in Dubai and some management changes that I will further elaborate in the case study report.

However, the building’s rent committee meetings are held on regular basis to discuss the building leasing status and the market situation. Much more needs to be done to ensure that the building is not only filled up, but that it remains so. To fill up the remaining 70% of the space, advertising, incentives and quality addition measures need to be addressed and implemented effectively and urgently.

Goals

• To facilitate all decisions and execute all contracts in relation to managing the building and keeping it operational.
• Provide extra services to the tenants on split floors (currently 3^rd and 4^th floors) such as pantry services and receptionists.
• To Achieve 60% occupancy of the building by the year 2011 and 100% occupancy by the end of year 2012 and sequentially reaching a breakeven point in respect of the building’s total operational expenses against its rental income which is expected to be achieved in year 2015.
• To resolve all issues in relation to the defects and snags in the building in order to maintain the building quality. It is worth noting that these snags and defects initially existed when “X” Company bought the building in its “shell and core” condition and these were not discovered during the time when the building was sold to “X” Company as the team who worked on the building’s fit out after the purchasing process eventually discovered these defects and snags.

Initial steps

Achieving a profitable management plan for a property may be a challenging task for most investors. For company X to achieve this, there needs to be various steps which must be set up as a foundation. These steps include;

Specification of investment objective

To ensure maximum benefits from a product in the housing business, there needs to be clearly set objectives. A successful business model and its management are guided by defined goals and timescale. Each objective has a determined importance and a plan as to how it will be achieved.

While some investors will take risks and some will do their best to minimize or avoid them, in both instances it is paramount that risks be identified in the earliest stages of the plan. The process of risk identification should also involve identifying constrains that could arise from special situations such as time horizons, increase in cost of raw materials, liquidity and legal policies, just to mention a few (Monden, 2000).

Choosing the product mix

According to Monden (2000) “in any investment management, the most important decision is with respect to the cost and product mix decision”. This step involves proper proportion of costs involved in designing and marketing the product.

The proportion is determined by several factors such as risk tolerance of a product and the market an investor is in, current prices of inputs and period allocated for different goals, among other parameters.

It is in this step that the cost management leader of a company has to decide in which class a cost will be placed, as well as which areas of spending will be cut. Company X can decide to focus on a product that is pocket friendly, or one that is luxurious hence costly. This would be dependent on the target tenants and the nature of the region’s market.

Formulation of strategy

Depending with the risks a manager is willing to take, the level of diversification required, and risks involved, the most suitable business model management strategy can be decided on.

Formulating a strategy further involves selection of designs after a fundamental and comprehensive analysis of parameters a product developer is interested in focusing on. In company X, a product developer could focus on the reliability, durability, ease of the product’s usage and uniqueness just to mention a few.

Plan execution

This step is one of the most significant determinants of how successful and effective a business model will be. It involves the implementation of formulated strategy, which may include investing in different sectors of the market at different times.

It could also involve implementation of measures designed to minimize risks or ensure stability in the company’s cash flow. In this case, a stable cash flow will be ensured by attracting and retaining reliable and consistent tenants.

Strategy revision and evaluation

Just like any other investment management, a business model management requires constant revision and evaluation. Changes in the price of inputs automatically change the value of a product in the market. Changes in Dubai’s regulations and policies will affect how processes are implemented in company X. Any possible changes in a market will affect a business and must be put into consideration.

This calls for regular changes on the investment plan to take care of fluctuations. Change of the business model or implementation may be necessary. Evaluation should be done from time to time to determine what is working and what is not. Like Bragg (2010) explains, “it helps the investor to realize if the strategy’s returns are in proportion with its risk exposure”.

Property and facilities management

Property management

“Property management roles are often concentrated on two sides: landlords (or owners) and tenants (or renters)” (Deakin,2004). The main aim of property management is to meet the needs of both parties. Roles and responsibilities of a property management company can vary depending with what they are trying to accomplish. A reputable property management company that pays attention to the adds. Nevertheless, the advertisements should be realistic and achievable, and not be comprised of empty words and promises.

A good property management company must find the right clients, give them the best services and then let word of mouth work for you. When a building has a few tenants already in, the rest is surely easy as long as services provided to are satisfactory. When they are about what is being offered to them, they are more likely than not to tell someone about their experience.

To ensure professional property management, Property Management Company, named “Asteco” has been hired by “X” Company to deal with all matters in relation to leasing the building. It is also expected to look after all the accounting and to coordinate all maintenance and repair work with a Facility Management Company hired by “X” Company.

Out-sourcing these services is aimed at helping X focus on the main tasks and minimize the need to develop a team to do the job, since the company has never done property management before.

Asteco Company is expected to take care of all the major things required to manage a rental property. These include;

Increase occupancy percentage

The first task that Asteco is expected to accomplish is increase the building’s occupancy. Currently, the building is operational but is most of the space is unoccupied. Only around 30% of occupancy has been achieved until now due to the economic crisis that affected the property market in Dubai and some management changes that I will further elaborate in the case study report.

However, the building’s rent committee meetings are held on regular basis to discuss the building leasing status and the market situation. Much more needs to be done to ensure that the building is not only filled up, but that it remains so. To fill up the remaining 70% of the space, several measures will have to be in place.

One of the most significant measures that Asteco is expected to undertake is advertising. Since the building was initially constructed for government functions, the property was not advertised as open to the building while under construction, as is the case with many buildings, Asteco is expected to advertising the building using word of mouth, brochures and the internet, among other available platforms.

Word of mouth will only be possible if the current tenants are fully satisfied. It is therefore paramount that services offered in the building stand out from common services offered in other buildings. The building will also be advertised through brochures and listing the building in websites where tenants can g and search for houses.

The other measure that will be undertaken to increase the number of tenants will be use of incentives. Through Asteco, company X will invest in offering services such as free mail delivery to the postal corporation of Dubai, and collection of mails by offering the buildings postal address to be used by tenants that do not a personal address.

Incentives also a well designed and furnished reception office to welcome and give directions to the tenants’ visitors and clients. Incentives also include free cleaning services for clients. This can be offered as part of the lease agreement or as a discount for the first one year to attract tenants.

Rental policies and procedures

Asteco will be assigned a responsibility of ensuring that policies and procedures governing the building are designed professionally. Lease agreements must put into consideration the needs of the landlord and well as those of the tenants.

While the landlord will be expected to hand over a space to a tenant in its highest quality, the tenant has a responsibility of keeping it that way and paying for all the damages that occur during their period as a tenants. Policies and regulations should also address the legal responsibilities of each party involved in the contract.

Supervise repairs and maintenance

The company is expected to work with Deyaar Company which has been hired to manage facilities management. Asteco will monitor and supervise their work, as well ensure accountability during and repair and maintenance tasks that need to be performed.

It is Asteco’s duty to ensure that all costs incurred in maintenance are competitive and fit into the company’s budget. It is also their duty to conduct inspection regularly and ensure that quality is assured in and outside the property.

Payment collection methods

As a property management company, Asteco has been assigned the duty of collection payment on behalf of the business. Lease agreements will state clearly the amount of rent due for the amount for space occupied by a tenant, as well as when it is due.

It will also be the duty of Asteco to ensure that tenants pay their rent on time. When it is time leave, an appropriate notice should be given and Asteco has a responsibility of ensuring that the vacant space is advertised.

Facilities management

Facilities management plays a crucial role in ensuring success, managing resources and minimizing risks. Lack of a proper facilities management strategy may result in risks from different uncertainties such as natural calamities, legal liabilities, deliberate attacks from an enemy and economic uncertainties, environmental bodies among many other causes.

For most part, facilities management methods consist of several elements, performed in a specifically defined order. They include assessment or identification of threats in a business’ facilities, assessment of the business’ vulnerability, consequences and identifying ways to eliminate or reduce the threats that ma y arise from poor facilities management.

A strategy must be set up to prioritize facilities management and minimize risks. Principals of facilities management include creation of value, addressing uncertainties, creating a systematic and structured strategy and creation of a dynamic and responsive facilities management procedure.

Deyaar Facilities Management is national facilities management company with a reputation for helping business improve their efficiency. The company has been hired to company X to look after the repair and work of the building and provide 24 hour emergency service.

The company was hired since company X was looking for a business whose primary objective would be to offer the business with solutions that help them operate their businesses more efficiently, as well as helping them implement the solutions.

Deyaar is expected to be primarily devoted to the maintenance of the business’ building and structures through fire protection and safety, risk assessment, control of substances hazardous to health, occupational safety and health, industrial hygiene and indoor air quality. The company is expected to accomplish this by managing some of these activities;

Fire protection as safety

We in company X believe fire safety and protection is important for a business for the following reasons;

1. It allows continuity of operations by preventing the interruption of key services offered by the business
2. Property protection is ensured by preventing conflagrations and having insurance considerations
3. Life is protected by ensuring fire safety standards and codes are in place

Deyaar Facilities Management Company will ensure fire protection and safety for company X by installing smoke and heat detectors, sprinkler systems, dry risers, fire alarm systems and other gadgets that will enable the business manage any fire risks before they occur.

Before all this is done, the company will perform a fire risk assessment to establish the level of risk the business and clients are exposed to, as well as what needs to be improved.

Health and safety

Company X expects that the business will have a lot of in and out traffic as it has most of the space leased as offices. As a result, if safety is not taken care of, a big number of people and their lives are threatened. It is for this reason that health and safety must be a paramount part of the building. Considering this, Deyaar Facilities Management must have in place a plan and strategy to ensure this is well addressed in the business.

The plan must help company X take the necessary steps towards ensuring compliance with the state and local laws regarding safety. Among such regulations are the Occupational Safety and Health Administration (OSHA).

To manage health and safety, Deyaar must also help company X achieve industrial hygiene standards in their kitchens, stores and warehouses. Indoor and outdoor air quality for a building that serves so many people in a day is important to keep those who need services in the building keep coming back and ensure their health is not threatened.

Another area that will need attention to ensure health and safety is control of substances hazardous to health. This will include ensuring proper handling of any food preparation places in the building, cleaning chemicals, proper management of first aid kits and cabinets, and any other substance that could pose as a threat if not handled well.

Security

Like any other building that has a drive-in-through and park-up setting, company X must ensure that their building is a favorite for many for services offered in the building. One factor that clients and visitors to a building consider before making a choice on where to stop and access services and products is their safety.

Occupants and visitors need to be assured of their personal security, their cars’ security, and the security of their property. Deyaar Facilities Management Company must identify elements that are crucial in ensuring security for such a building. These elements are designed and implemented in different layers.

These layers include environmental designs, personal authentication, electronic access controls and intrusion detectors to ensure appropriate response measures are in place.

Deyaar Facilities Management is expected to assure security to the business, its property and its customers by installing obstacles that delay serious security threats and attackers, and frustrate the trivial ones. They are also expected to ensure security by installing explosion protection measures such as bomb detectors, security lighting, surveillance cameras and alarms.

When managing security, a proper response strategy is crucial in stopping and minimizing damage. A security response strategy will therefore have priority when managing company X facilities.

Putting in mind that no specific solution will satisfy the business’ broad class of security situations, Deyaar Facilities Management Company is expected to perform an analysis to establish the business’ needs and come up with customized solutions to each of the security problems and needs. Among the solutions that company X has already established include manned guarding, intruder alert, Access Control and CCTV technology.

Operational management

Operational procedures in a business deal with designing and overseeing business operations that address the management of goods and services. It is responsible for ensuring that business operations are running efficiently and effectively.

Deyaar Facilities Management Company is expected to help company X to handle its operations effectively by designing procedures that help save time, produce results and monitor progress. Among these operations include running the help desk that allows visitors access the place easily, inquire about parking regulations and to maneuver through the building.

Managing people and traffic play a key role on operational management by ensuring people have easy access to the inlet and the exit. Deyaar Company is expected to see to it that the parking and the ordering counters are designed in a way that they can accommodate disabled people.

Different groups of people such as expectant mothers and those with small children will have their needs taken care of. The toilets for example have to be clean and ensure comfort by having separate toilets for people of different sexes and those with disabilities.

Cleanliness is paramount for a business such as company X. Visitors need to feel comfortable enough and have a reason to come back. Tenants need their hygiene taken care of to ensure they don’t use it as a reason to leave. Deyaar Company is expected to ensure that cleaning procedures and programs meet the needs of the business.

A key area in cleanliness is waste management, which should take into consideration the cost, environmental consequences and other factors. Company X will have all the cleaning procedures and chemicals researched on to ensure that they don’t pose any threat to tenants and visitors’ safety.

Managing large volumes of supplies will be a big consideration when putting up a strategy to manage stores, freezers and the kitchens. It is important that storage compartments, especially those designed for foods and other perishable products do not expose anyone to food poisoning or damage its quality.

Every business today is faced with the challenge of managing environmental issues. Deyaar is expected to use its experience and help company X meet the national and local environmental regulations such as the Environmental Protection Agency (EPA). Buildings planning, layout and placement of structures all count in environmental management.

The company is expected to have procedures that ensure a daily inspection of waste management, water treatment and level of traffic managed in the building. Issues such as pest control, vending and car parking are also expected to be addressed.

Maintenance systems

Maintenance systems ensure that all the investments a business has put in place are well maintained and give back the value. For company X, such a big building is expected to have tenants that will use big, heating, refrigeration and cooling systems. Managing them is part of Deyaar Company and is expected to be a big part of their task operations.

Furthermore, Deyaar Facilities Management offers services such as researching and installing the best heating and cooling mechanisms for such a building. These are services that the tenants can use for different purposes in their offices. Deyaar is further expected to address air conditioning to ensure appropriate conditions for tenants and visitors.

Part of Deyaar’s work will include installing predictive and preventive maintenance measures to help manage damages before they escalate to unmanageable levels. For example, rooms with cracked walls will need to be fixed early enough before it’s too late, and before they offer an opportunity to people who are a threat to security. Corrective maintenance also ensures early repairs when they are still cost effective to perform.

The parking lot and drive ways must be constantly checked to ensure the comfort of customers. The surrounding such as the grass and gardens must also be well manicured and managed to keep the place appealing to tenants as well as their clients and visitors. Deyaar Facilities Management is expected to ensure this by building automation systems that help the business detect defaults early enough.

Fabric and decorations used in the building’s reception area have to match with the buildings’ class and quality. Other important factors in maintenance systems will include reactive repairs, control measures and horticulture.

Periodic statutory inspections and testing

Statutory inspection and testing deals with work equipment, managing pressure systems, fixing wiring and electrical appliances and other emergency applications such as lighting. Deyaar Facilities Management will ensure that man-safe systems such as access to the roofs and cleaning windows in done in a way that doesn’t expose anyone to danger.

There will be laid down procedures for fixing wiring, handling portable appliances and handling emergency electrical operations such as lighting. In order for fire protection and other safety measures to bear fruits, regular inspection and testing will be used to keep everything working and correcting what is not working on time.

Deyaar Facilities Management is expected to use its experience to put in place measures that enable the business to reap the benefits of all its investments in safety.

Risk management

Deyaar Facilities Management will address and help company X deal with technical risks related to professionalism of the project and issues that affect it directly. These risks include incomplete or wrong designs and uncertainties over availability or delivery of materials when the business is doing any constructions such as expanding its parking space and stores.

Managing technical risks will also cover handling inadequate or inaccurate site assessment and wrong specifications and estimations. Other types of risks that a good facilities management plan will help manage include logistical risks, which are mainly caused by lack of proper transportation infrastructure in the vicinity where the building is located. They include availability of resources and a timely delivery of materials.

Another significant risk that company X needs to manage in its facilities management program is construction risks. Construction risks include safety and natural uncertainties. Tenants’ safety and well being, stability of the finished project and protection against natural risks such as strong winds are the major concerns in construction risks.

Company X must have structures that ensure its protected from extreme temperatures, winds and other natural and man-made disasters such as floods. If there are new projects to be developed in future such as extensions, project developers have to ensure fire safety measures even before projects commence.

Other examples of construction risks are poor industrial relations, weather implications and uncertain productivity of materials. All these are areas that a good facilities management plan could help by saving the business save a lot of money.

Expected results

Diversification

Investing in property is considered a less volatile investment, making it a better investment when other markets are going through a struggle. Having a portfolio that allows diversification further protects an investor when the real estate markets are going through a hard time. A good example of the industry can be affected by unstable economies is the recent 2008 global economic crisis.

Diversification in property management can be assured by ensuring an aggressive and up-to-date consideration and understanding of various parameters such as interest rates, profit margins and rental market rates among other things. It can also be achieved through comparable returns of the property in different seasons and trends in the market.

Stability

The purpose of making a portfolio and a management plan is to prepare for the future. A good management plan must allow company X to place their investment in a position that will have good returns. It should have a solid plan of what ought to be done should the markets change to an unexpected direction.

Because a big percentage of the return on property comes from rent, fluctuations in most economic parameters will have little impact on the value of the investment. However, other parameters in the markets have an inverse effect on the return of a building. For example, increased insurance and utility rates will mean that company X will incur more expenses.

The relationship between the two poses a significant challenge to investors, especially those who want to have the same business model for a long time. Therefore, a good management plan should take these factors into consideration before a decision to design what they want to offer to the markets. This will in turn create a sense of security in knowing there is a plan.

Consistent income

A good management plan is expected to increase the building’s returns. If all the remaining space was leased, the building is expected to be profitable and fully cater for its expenses every year. The plan must ensure that payments at different intervals are utilized and invested well.

Furthermore, it should have well laid plan on how different market trends will be managed. Even though rental houses are constantly referred to as fixed income investments, they pose risks to an investor. They can earn big losses especially when they lose value or when tenants are forced to close down due to different market challenges.

Manage risks

While rental houses are generally considered as a safe investment, there are various risks associated with them. He most significant as already seen company X is when there are not enough tenants. If a building was build using borrowed money, interest rates could go up leading to fewer returns. Reduced income risks arise as a result of the relationship between income and expenditure.

Other risks that need to be managed in a plan include the occurrence of natural or man-made disasters. A good plan must address this through insurance and other protection policies. Furthermore, capital depreciation could occur if a building’s ratings go down.

Legal considerations and taxes

A good property management plan must not consist of any fraudulent or illegal transaction in the plan. It should also be able to take advantage of tax free payments for investments where that is applicable. This is especially beneficial for those investors in the high tax bracket.

Just like other countries, Dubai’s laws and policies have provisions and incentives for different classes of investors (Central Intelligence Agency, 2011). Company X expects that a good plan will help it take advantage of the different provisions and develop a more stable business model for managing the building.

Succeeding in property management

Proactive approach to cost management

Understanding costs and profitability allows businesses to take a proactive approach to cost management. Traditionally, businesses manage costs when a product is already finished. Direct costs which make up more than half the cost of a product remain a challenge to many investors. Target costing as has been evident in many Japanese businesses can help a business manage costs by cutting on it at the design level.

By having a set cost of production, a business is able to have control of their profitability. A proactive approach will reduce speculation and yet makes it possible to approximate profits in company X. Cost management can be done at the design level by deciding what services the building will offer and what the tenants will provide for themselves.

Orienting a business towards clients

In such a competitive field, it is important for a business to orient itself towards its clients. The size of the offices designed in company X’s building are big and one client takes up a lot of space. This means that losing one clients could means significant losses for the business. Furthermore, more property developers continue to register a presence in the country, leading to a high level of competition.

Orienting company X towards client will ensures that a business knows what to expect from the customers, as well as what is expected of them. Since the housing industry is very much dependent on survival zones, the company will be forced to understand its clients comprehensively. This includes their needs, expectations and spending trends, among others.

The company will further be forced to understand its competitors, strengths and weaknesses. This kind of knowledge and market understanding will empower the company to design and offer services that are needed in the market. Chances of being in the low survival zones will be reduced and profitability will soar.

Breaks down barriers between investors and locals

For a business to succeed in any country, it is important that it established a healthy relationship with the locals. Understanding the markets can only be done through feedback. A good relationship with employees, clients, financial institutions and even the government ensures that a business has access to genuine feedback from different stakeholders.

The government of Dubai plays a significant role in ensuring that investors are accorded all the support that they need. Furthermore, it is only through improved relationships that company X will be able to access the best labor in the market.

Having synchronized departments

The design and production of a product in the housing industry is very dependent on the logistics, purchasing, human resource, production and quality department. These departments will be responsible for ensuring availability of supplies, how they are managed, designed and how the final product looks like as well as how much it costs.

Working together in the initial stages of a product keeps the department and their activities synchronized. When the product is already out in the market, managing it will be an easier task since every department is well conversant with its strengths and weaknesses.

It is therefore important for company X to ensure that every member of the team in this project is well conversant with what is expected from the product, as well as how it is going to be achieved.

Research implications

This research is aimed at shedding light on the situation of the real estate market in Dubai. The region’s real estate market is considered among the most vibrant in the world today. As a result, new rental buildings are coming up every day, a situation that could make it hard for property managers to fill up a rental property.

Furthermore, the state and quality of properties has to be outstanding for a landlord to attract and retain enough tenants. The research will also be used to analyze rental property management techniques and their influence on the success of a building. The role of quality management will be analyzed.

The information is relevant to all landlords as well as property managers. Landlords can use the information to understand the importance of ensuring that they have well experienced managers in the field of quality management as well organizational skills.

Property managers can use the paper’s findings to understand the different techniques that can be used to attract and retain tenants. By analyzing policies and regulations in the industry, the information will also reflect on the role of the government in ensuring that investors are well rewarded when their buildings are complete.

Research limitations

Dubai is still considered a developing nation. This raises several challenges common in developing countries. Information availability is a significant challenge for this research paper. There lacks a well organized and updated warehouse where one can access information about rental properties in country, trends and challenges.

Time allocated for the research was limited making it hard to comprehensively cover some of the topics. Language barrier was also a significant challenge. A majority of people in Dubai speak Arabic. Collecting information and translating it into English for the report is time consuming and the process could lead to loss of specific details.

Conclusion

Quoted in Estates Dubai (2011), “the managing director of Chesterton International said clients are emphasizing valuers to match their older pre-cash valuations carried out on their assets, as they feel that the market has made sufficient recovery this year”.

Dubai’s economy has been among the best performing in the gulf region. It is also among economies that have registered full recovery from the recent economic crisis. The crisis which negatively affected profitability in the real estate industry has however presented significant lessons to property managers.

“Several larger companies possessing properties had earlier decided not to value their portfolios, as they were aware about the decline in rates since 2008. However, these companies are currently beginning to again compare values as markets improve” (Estates Dubai, 2011).

The future of the real estate industry is bright in Dubai and property owners such as company X are expected to gain. However, significant gains are only possible through a well researched on designed property management plan.

From this report, it is evident that there are many facilities management processes applicable to company X. The first step is to put in place specific procedures and in-house regulations that deal with facilities safety measures. The business should also adopt standardization of facilities management processes, to ensure minimized risks and consistency.

It is important that the business puts its developers into task, to ensure that their teams are well trained on facility management, risk management and safety. Training should involve intensive consultations from experts such as Deyaar Facilities Management Company and from business that have managed to achieve excellence in facilities management.

Traditionally, financial paradigms have been characterized by very little activity as far as property management is concerned. Buildings are considered a predictable and safe investment. As the market becomes more and more diverse, investors realize the need to manage their property management plans with more aggressiveness.

Activity and interest have increased in the property markets as more people gather confidence to invest in the industry. Initially, more people felt safe to invest in properties that attract big clients such as hotels and banks.

Today, more investors are coming in to the regular market, making it very competitive (Oxford Business Group, 2008). As a result, managing a property is not a guaranteed profitable affair. There is need for a business to address different challenges such as market trends, preferences and challenges.

The process involves several stages such as specification of investment objectives, choosing the product mix, formulation of strategy, portfolio execution, revision and evaluation. To ensure maximum benefits from the investment, there needs to be clearly set objectives. Successful property management is guided by defined goals and timescale.

The process of product mix is determined by several factors such as risk tolerance and period allocated for different goals, among other parameters. It is in this step that the property management company will be expected to decide in which class different products will be placed.

After choosing a product combination, there will be need to formulate a suitable strategy, done in consideration to risks company X is willing to take and the level of diversification required. The execution will be significant and will determine how successful and effective.

To make the plan successful and profitable, a better strategy, diversification, stability, risks management and income management will be part of the long-term plan. A good plan like explained in the report must also allow an investor to place their investment in a market that will have good returns. Choosing a target market will therefore be a critical part of the plan.

Company X will also have a solid plan of what ought to be done should the markets change to an unexpected direction. Furthermore, the company will take advantage of the available rating system to know the amount of risk they are facing as an investor.

Addressing legal challenges and policies will be paramount to ensure consistent and a smooth flow of operations for the company. Understanding legal requirements and policies could also help the business save money through taxation classes and benefits.

Reference List

Bragg, S. (2010). Business ratios and formulas: A comprehensive guide. Hoboken, N.J.: Wiley.

Central Intelligence Agency. (2011). United Arab Emirates. Web.

Deakin, M. (2004). Property management: Corporate strategies, financial instruments and the urban environment. Aldershot: Ashgate.

Estates Dubai (2011). Property valuators being pressurized to value properties at ‘pre- crisis’ levels. Web.

Monden, Y. (2000). Japanese cost management. London: Imperial College Press.

Oxford Business Group. (2008). Report: Dubai 2008. Oxford Business Group.