In this second podcast of our program "Parlons Tertiaire", broadcast on Radio Immo on April 30, 2021, Chloé Rayssac and Sylvain Levy-Valensi host Csongor Csukás, Président of APROMA and President of property at BNP Paribas Real Estate, and Nordine El Ouachmi, President of Buro Station and Bureaux&Co.
In this episode, we discuss the future of the property management profession and the challenges ahead, particularly with the development of flexibility and services.
(Audio only available in French)
Chloé:
Csongor, in the current context, how do you see the future of the property management profession? Do you think it will lean more towards technical aspects or towards providing services?
Csongor:
I believe the future is quite bright. Before COVID, property management faced a crisis regarding margins, and external coworking operators claimed to better understand our clients' needs and be able to satisfy them more effectively. We have been in this industry for a long time, and I can say that the prospects have not been this good in a while. We needed to be shaken up, put to the test, and COVID brought a lot of awareness regarding ecological aspects and accelerated digitalization. It also repositioned some professions, with property management being one of them. During this period, we ensured the security and continuity of operations in buildings, which are essential for a functioning economy at our level. This experience has helped us refocus, and now we cannot overlook either the technical aspects or the service-oriented approach. We need to position ourselves as partners for investors and property owners, providing services to tenants. This partnership involves two levels of support: the first is in the normal course of business, where our clients have outsourced certain technical aspects that we need to manage without them necessarily being aware of it. The second level is when there are specific situations that require decision-making. During crises, we need to provide advice and offer more personalized services. So, the answer is twofold, and I see a positive future ahead for property management.
Sylvain:
If I understand correctly, both technical expertise and service provision go hand in hand. It seems that the notion of service has taken precedence in expertise and consulting. Do you consider this a new way to express the property manager's role? And is this service ready to be remunerated accordingly?
Csongor:
Technical aspects are also services. It's not enough to have a friendly receptionist at the front desk providing a good first impression. If the air conditioning doesn't work in the meeting room, the experience will still be poor, and clients won't be willing to pay for that experience. What's interesting is integrating technical expertise with a service-oriented approach, which is precisely what coworking operators have done so well. We have been inspired and challenged by them because, in their case, even technical aspects can be considered a service, and they have integrated it throughout the value chain. They handle everything in-house to ensure control over the end-users' experience. And does it pay off? Yes, if the end-user, including myself, wonders what services or products they are willing to pay for and if it adds value to their lives. If we offer something valuable, but there is a disconnect in pricing, it means we are no longer meeting a need, and clients will consider it expensive and won't be willing to pay for it.
Sylvain:
So, you don't fear that professional pressure and the desire to secure mandates will push property managers to lower their fees?
Csongor:
If we continue to industrialize an outdated offering, then, of course, prices will decrease. But we need to work on the offering, understand what our end clients truly expect, and meet those expectations. When we can fulfill these needs, clients are even willing to pay more. For instance, in one building, tenants complained about high operating costs. We removed all services and asked them what they wanted. They ended up adding more services than there were previously, and we told them that they would have to pay more. Surprisingly, they said, "Yes, but it meets our needs." Often, there's a gap between what we offer and what clients expect. So, for once, and thanks to coworking operators who have shaken us up in this regard, we need to meet specific needs to capture the market and set prices that cover the costs of the service.
Chloé:
Nordine, considering this market and what has been said, what are your ambitions? I've heard that some real estate companies are proposing to manage all the buildings where you have your centers. How do you position yourself in this situation? In your opinion, will property managers have a place in such assets in the future, and can you coexist in the same buildings?
Sylvain:
To add to the question, do you think there might be competition between the two professions?
Nordine:
What is certain is that we see a demand for managers, space operators, and coworking operators that has expanded. Initially, we created our brands, and each one took charge of managing its own space. As our profession evolved, we realized that the services we offer are similar to coworking. So, we would like to see these services integrated into the overall volume of the building. Recently, we've been witnessing a growing demand for incorporating coworking spaces into larger buildings. The idea is to mutualize certain resources and create interactions between users. There is a significant demand in this regard. We also manage the technical aspects of the property, such as ensuring compliance, handling structural issues, and more. It feels like the industry might split into two parts. Today, we rely less on property managers and hence can negotiate fees because coworking operators and space managers handle the technical aspects locally. However, the administrative management of rent, billing, collections, revisions, etc., is still something that property managers are responsible for.
Csongor:
I think there is still a difference between common spaces and private spaces. Corporate and large users already have internal departments to manage their workspace, while coworking operators have brought something new to managing private spaces, with a more service-oriented approach. However, this does not necessarily encompass common spaces and all the facilities that go along with them. Those aspects still fall under the domain of facilities management, and we shouldn't overlook it. For common spaces, we manage all the facilities to ensure a comfortable environment in private spaces. So, for me, coworking operators focus more on users, while we focus more on the property owners. Of course, to satisfy end-users and employees who need a conducive workplace, there should be consistency in experiences in both private and common spaces, contributing to the success of a productive building.
Sylvain:
How do you see the year 2023?
Nordine:
In 2023, I believe we will continue to experience a demand for flexibility in the use of office space in the tertiary sector. There's an increase in demand for setting up spaces in our coworking centers. So, I think it will continue in this direction—genuine demand for service-oriented buildings and a strong need for flexible usage. Ultimately, real estate needs to be more service-oriented.
Csongor:
What happened in 2020 was a year of survival. The pandemic caught most people by surprise, and in 2021, we actively sought ways to adapt better for the future, leveraging digitization, flexibility, nomadism, and remote work to become more environmentally friendly, productive, and fulfilled, striking a balance between professional and personal life. This is where property owners and users share the same objective. The property owner aims to differentiate and be attractive to users by offering a fulfilling workspace for their employees. Both objectives require support from coworking operators or property managers. Thus, 2023 will be a year where we can demonstrate how useful and supportive, we can be in realigning the interests of all stakeholders in the real estate industry.