World Facilities Management Day: A peek into what keeps luxury real estate projects in shipshape - Hindustan Times
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World Facilities Management Day: A peek into what keeps luxury real estate projects in shipshape

May 08, 2024 04:44 PM IST

Facility management in luxury condos is all about having experts take care of residents’ needs, not to mention the high maintenance costs that go into it

Ever wondered why everything at your workplace looks spic and span? Right from the entrance, the office interiors, the canteen area, not to mention the gardens - everything seems too perfect, almost a leaf out of an interiors magazine. Have you not wished that you could perhaps be more productive at work if the same seven-star experience can be replicated back home too? It is possible, provided you invest in a luxury residential complex maintained by global facility management companies.

These days several consultancies have started providing for facility management services in luxury real estate projects that are often managed by hotel management staff(Cushman & Wakefield)
These days several consultancies have started providing for facility management services in luxury real estate projects that are often managed by hotel management staff(Cushman & Wakefield)

These days several real estate consultancies have started providing facility management services to residential complexes that are often maintained by hotel management staff, gardens are tended by horticulture experts, there are private cinema halls in the club area that can put local theaters located in the neighborhood to shame, Many of these projects have a luxury spa, pet grooming and concierge services, not to mention the occasional first time peek into what a certain global fashion brands intend to launch in the forthcoming season - all within the four walls of your residential project.

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Welcome to the world of luxury living. A five-star residential set-up managed by trained facility managers who go beyond looking after your plumbing, electrical, fire safety requirements to provide for flower delivery of your choice, manage custom-made apps, not to mention organize tournaments, musical gatherings and private parties, all at the press of a button.

From a real estate perspective, a vibrant ecosystem with these facilities can help push rentals and escalate capital values as well.

Facility management services in mid segment versus luxury housing complexes

While the scope of facility managers in the mid segment housing projects is generally limited to cleaning services, waste management, maintaining amenities such as fire fighting equipment, plumbing and electrical services, in super luxury condos the difference lies in the cost of providing 5-star butler services, personalized amenities for fitness such as exclusive health-based services, upkeep of flower decorations, concierge services among others.

“Right from the smart uniforms worn by the staff, the top notch security agency hired to look into security requirements of the housing complex to the 5-star hospitality ambience, all add to the common area maintenance charges that the owners are expected to pay month-on-month in a luxury housing complex,” said Sathish Rajendren, Senior Executive Director - Facilities & Asset Management Services, Knight Frank India.

A full-time manager hired to look after requirements of residents of a luxury tower does not cost less than 50 lakh a year but the same service if provided in a mid-segment complex may cost just about 25 lakh a year. “The differentiation is in the form of services provided - more services means higher CAM (Common Area Maintenance),” he said.

All about common area maintenance charges

CAM refers to the costs associated with maintaining and operating common areas within a residential complex. These common areas may include lobbies, elevators, parking lots, landscaping, fitness centers, spas, clubs among others that residents may incur every month.

In general, the charges range from 8 to 10 per sq ft for mid-segment projects; 10 per sq ft to 15 per sq ft for luxury apartments and 16 per sq ft to 20 per sq ft for a city such as Mumbai. In Delhi, the charges vary from 8 to 12 per sq ft for mid segment projects; 12 to 14 per sq ft for luxury and 15 to 18 per sq ft for ultra luxury properties. In Bengaluru CAM charges are between 8 per sq ft for mid-segment projects, 10 per sq ft and 10 to 16 per sq ft for high-end projects. Charges for villa communities are higher at around 15 to 22 per sq ft, Rajendren told HT Digital.

“Charges depend on the amenities on offer. These additional amenities could include restaurant brands, fitness club management, overall pest control, landscaping, water management during crisis, exclusive landscaping services for villas, latest technology to manage home apps, acqua zones, specialized help desk concierge services, event managers to meet the residents’ entertainment requirements among others,” he said.

Knight Frank has managed a range of housing complexes starting from 100 units, 1000 units to an entire township consisting of 3000 housing units.

“Financial management of a project is clearly specified before we take over a project. We prefer taking on a project at the time when the developer starts handing over the project to the residents. The contract generally is for a year,” he said.

Cushman & Wakefield’s Property Management Services arm is growing rapidly, increasing its contribution, year-on-year, to the overall India business. Besides residential complexes, the global International Property Consultant (IPC) manages commercial offices, warehouses, data centers, retail and manufacturing hubs as well. The consultancy manages close to 180 mn sq ft of portfolio under PMS.

Also Read: Standard Chartered Bank appoints Cushman & Wakefield to deliver property services across Asia

An entire team is deputed on site to manage housekeeping services, security services, horticulture services and technical services including chiller and safety equipment management - such as fire fighting systems in addition to elevators and UPS rooms amongst others.

“Diesel generators in housing societies require regular pollution checks and pollution control certifications, lifts need regular inspection and certification, apart from STP and other critical equipment. All these aspects are also managed by our facility management teams. People who are part of the Residents’ Welfare Association often do not have specific technical knowledge and the wherewithal to run the housing society once the developer hands over charge to them. That’s when we come in. Our teams are trained to make sure that the buildings are safe, secure and compliant,” said Manoj Sharan, Managing Director - Cushman & Wakefield Property Management Services India.

Also Read: Delhi-NCR's real estate market: Here's why rich Indians are lapping up luxury properties

C&W also offers services such as ESG services, laundry services, pet care services, doctors on call and also provides customer relationship managers (CRMs) in luxury condos. Other conventional services include plumbing, carpentering and electrical works. “We’ve even managed an art gallery for a large banking client for which we had to depute specialized people to clean the art work on a regular basis,” he said.

Hospitality managers deployed in each luxury residential tower may push up the CAM bill

The Common Area Maintenance (CAM) charges differ based on the services that are being provided in a housing project. “For centrally air conditioned luxury properties, the common area maintenance charges will include the cost of running and maintaining the central air conditioning system. The tower managers deployed at the ‘meet and greet’ desks will generally be persons from the hospitality background and their salaries could be anywhere between 18 to 25 lakhs a month. All these costs get built-in into the CAM charges,” he explained.

Also Read: Real Estate trends: Five clinchers for a 100 crore property deal

The CAM charges for regular apartment complexes range between 3.25 to 4.00 per sq ft per month, the charges in a super luxury housing society will be anything between 5.00 to 6.50 per sq ft per month. Almost 75% of the cost will go in as manpower cost to pay the people working on site, he said.

According to Rajesh Pandit, Managing Director, Global Workplace Solutions, India & Property Management, India, South East Asia, Middle East & Africa, CBRE, facility management is not a new concept.

“Buildings have been managed in some form or the other for decades. Having said that, with several high-rise buildings getting constructed, facility management requirements include engineering expertise to run electric generators, not to mention managing lifts and air conditioning in a luxury complex.”

Besides the day-to-day security needs, there is now the need to manage digital security of a housing complex as well. “Right from maintaining CCTV cameras in a housing complex to managing visitors through face recognition apps, to issuing passes for entry at multiple points - all this requires security experts being deployed across the housing campus,” he said.

Earlier, housing complexes were managed by retired residents but now with the business of managing a high-rise residential society becoming complex, “specialists like us are required. Besides day-to-day management, support of specialized financial managers is also required today. Earlier, these jobs were being handled by residents themselves,” he said.

Also Read: Luxury villas in the sky: Mumbaikers now upgrading to duplex and triplex apartments

Today, housing societies have to incur high capex in running lifts, maintaining fire protection equipment, running sewage treatment plants - all these expenses become part of common area maintenance charges, he explains.

“CAM charges may be high in an apartment complex where residents may expect a tower manager to be present 24x7 on call. These people would have to be made available in shifts and that means higher costs to manage the building,” he adds.

Imported plants, horticulture experts can also push up common area charges in high-end housing society

In some societies, horticulture may become a differentiator between mid segment and luxury housing societies. It may also push up common area charges.

“The type of plants grown in a luxury housing complex may push up CAM charges. A society that decides to plant only greens in a housing complex to a society that decides to plant imported, exotic plants of varied hues in different seasons - all these choices come for a price,” he said.

Also Read: Mumbai real estate: All that you need to know about ‘bulk’ property deals being registered in the financial capital

In some housing projects, residents may decide to go in for organic farming to differentiate from other societies. “In one housing complex, residents decided to do organic farming. The vegetables grown within the premises were used by the club being run within the premises,” he said.

The number of lifts in a tower can also increase CAM charges

Utilities such as air conditioned lobbies in luxury condos also push up maintenance costs in a housing project. The value of managing luxury projects depends on the size of the project as well. If there are four lifts for 100 apartments and four lifts for 50 apartments, the former’s CAM charges would be less than the latter.

That’s not all. CAM charges for a society where a swimming pool is manned by a lifeguard for 12 hours would be more than a similar facility being maintained for six hours, he explains.

Take the example of solar energy panels, if a builder did not plan for solar energy, but if residents decide to take on the initiative at some point after the handover of the project, it would become part of their capex. “Having said that, once it is operational, the savings that accrue to the society in terms of energy savings are huge,” he adds.

A housing society’s CAM charges also depend on how it decides to celebrate events, “the vibrancy of these celebratory initiatives,” he explains.

CAM charges also depend on how many times the exterior of the complex undergoes renovation. “If the project’s exterior walls are painted once every 10 years, the CAM costs would be less than a project that is painted every two years,” he said.

CAM charges in a project that has nursing support for eight hours versus a doctor-on-call round-the-clock would be lesser. “Having said that, the same charges may increase if there are ambulances kept on standby. It’s because of this reason that some developers may have one ambulance to service two to three projects. This helps bring down costs,” he adds.

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