Demand rises for high-quality building managers

Consolidation

In recent decades, the mainland's property management sector has grown rapidly. Decades ago, the field was almost nonexistent, but last year, revenue exceeded 600 billion yuan ($89.5 billion), according to the China Property Management Institute in Beijing. The organization's statistics cover 118,000 enterprises with more than 9 million staff members.

Despite the sector's explosive growth, the development of services has been uneven, according to the organization.

That view was echoed by Ding Yu, a construction consultant in Lu'an city, Anhui province. "Property management in coastal cities is generally better than here (Lu'an)," he said.

He added that most property management companies in Lu'an operate on a small scale and undertake few management responsibilities: "They are almost invisible, except when they collect the administration fees every month."

According to Ding, effective property management relies on well-trained employees and sufficient manpower to maintain quality and efficiency, which requires significant investment in staff and training.

He believes that many property management companies in small cities lack a sustainable business model because they are trying to survive by keeping costs low. That means they have little motivation to hire more staff members, or train them properly.

Statistics provided by the China Property Management Institute show that the industry is far from becoming integrated. The top 100 businesses in the sector account for about 30 percent of total revenues or areas managed.

However, changes are underway. In an article published by the institute, Shen Jianzhong, the president, warned that in the near future, the quality of services provided will be the key factor that determines whether property management companies thrive or fail.

Shen said the number of property management companies on the mainland ballooned "from zero to many" from the 1980s to the early 2000s, but as quality of service becomes a priority, there will be a shakeout, meaning the number of players will fall dramatically.

Hui, from Hong Kong Polytechnic University, agreed with Shen's prediction.

"The market appetite for high-quality management to match high-end estates is rising," he said, adding that Hong Kong companies and professionals will find their niche in the mainland's booming high-end property management market.

Opportunities

Tong said the mainland will provide young people from Hong Kong with opportunities to climb the career ladder. He noted that the Guangdong-Hong Kong-Macao Greater Bay Area will be fertile ground for young people aspiring to join the property industry.

It aims to become the world's foremost bay area and city cluster to lead the world in high-tech and industrial development, and international trade. Tong said he is certain that property management will play an important role in the development of the bay area's 11 member cities as they modernize and pursue a sustainable development strategy to raise living standards.

Hui said there will be at least three approaches to reshaping the industry in the bay area: a rising number of property companies from the mainland will raise capital in Hong Kong's financial market; having secured sufficient capital, they will expand, establishing scalability and better cost-effectiveness; and market competition will expand to cover not only prices, but also consumer awareness and company reputation.

From the government's perspective, he expects cross-boundary communication and collaboration to concentrate on removing institutional obstacles to promote factors such as mutual recognition of related occupational qualifications or certificates.

Hong Kong's universities could play a role, too. "In cooperation with partner entities in the Greater Bay Area and beyond, we could provide training in property management via short-term courses or even degree programs," he said.

As people within the industry receive more professional training, and capital and policy support grow, Hui hopes the sector will embrace a new era that will ensure improved management and quality services.