Commercial facility management – an effective way to achieve passive profit
One of the most important advantages of investing in commercial real estate with Higasa Properties is the possibility of achieving completely passive profit, i.e. one that arises without the involvement of your: time, effort or even concern for the technical condition of the facility or supervising tenants. Not to mention their acquisition (commercialisation). At the opposite extreme, for example, there is apartment rental, in which investors usually look after most aspects themselves, e.g. fees, repairs, formalities related to renting and, above all, ensuring continuity of rent. However, we do not deal with this market. When thinking about the lowest possible involvement in making profits, it is worth having an effective manager next to you. Therefore, in the entry below we will briefly present another area of Higasa Properties business.
Bank deposit, bonds, investing in gold – these are just some examples of passive investments. If you have an apartment that you provide for short-term rental, and an agent deals with all matters, you also get passive income. The example of a long-term apartment rental given in the introduction is also possible in such a model, but one should take into account a lower profit, because a part of the income will be allocated to a specialised company. When calculating the profits from such an investment, it must be taken into account that management consumes up to 20% of rental income.
How to passively earn on commercial real estate, additionally bearing much lower management costs (7-8%)? Let’s try to picture it again. The investor becomes the owner of a retail park (here it is also worth using the offer of Higasa Properties). His portfolio includes a facility with a grocery store, drugstore and family fashion store. In order for everything to function smoothly every day, when the facility serves customers, it is necessary to organise a resourceful technical service, security/monitoring, waste disposal, order on the premises, maintenance of efficient systems, etc. Of course, the investor can face these tasks on his own and react swiftly when, let’s say, the door get stuck in a store or the air conditioning stops working. However, we know from experience that taking everything on your shoulders does not work and there have already been examples in Poland when such a business model has not worked.
Therefore, by arranging all the elements and planning the Higasa Properties investor offer, we have prepared a comprehensive plan. We build, commercialise, acquire investors, and finally facilitate the facility management ourselves. “Higasa Properties represents the owner in all matters regulated by the contract. As a part of management, we carry out activities such as: keeping a building log book and technical documentation, commissioning technical inspections of real estate in accordance with the construction law, controlling and supervising how lease/tenancy contracts are performed, as well as making settlements with tenants in the scope of rent and additional fees,” says Klaudia Fera, Facilities Management Specialist at Higasa Properties. The list of necessary actions is really substantial: apart from the basic inspections resulting from the construction law, i.e. an annual and five-year inspection, the owner of the property has many other obligations. It is important to ensure the inspection of fire protection systems, as they are one of the most important – they serve to protect the health and life of people using the facility. The proper efficiency of air conditioning, air curtains, humidifiers and air heaters should be added to this.
In addition to technical aspects, it is important to ensure cleanliness in the facility. In winter, it is necessary to provide snow removal. It should also be borne in mind that when the roof is covered with more than 2 cm of snow, work should be outsourced to a specialised company employing qualified employees with licenses. The external appearance of the facility is our trademark so we make sure that we present ourselves as well as possible.
In addition to technical issues, unpredictable failures must be taken into account. An immediate response is needed to remove them. As a management company, we work with specialists in various fields, guaranteeing quick response times.
The above list is of course exemplary, and each contract is tailored to the individual needs of the client and the specifics of the property. For a retail park or even a single facility to function efficiently, it is important to keep the property in proper technical condition so that it does not lose value. In addition to the technical factor, largely resulting from the regulations, we emphasise the psychological aspect. We care for a positive image of the facility – both among tenants and customers. Proper maintenance of greenery and cleanliness is the basis for a positive reception by the customer. We make every effort to ensure that customers feel safe and at ease while shopping in the facility,” emphasises Klaudia Fera.
Another advantage in favour of our offer is the scope of activities. As we often emphasise on the blog as well as during press interviews, EDS and Higasa companies have a wide offer. We buy land for buildings ourselves, we build them ourselves and we make sure that contracts with tenants are signed efficiently. A well-conducted investment analysis and the subsequent commercialisation based on its results are a guarantee of profit.
By entrusting us with the management of premises, customers gain not only measurable profits in the form of high rents, but also time and peace, which value, in fact, cannot be estimated.Back