Malicious tongues (and long-standing market observers) claim that the property business in Switzerland runs smoothly, in good times and bad, and without much help from the property sector. However, the example of property management shows that not everything always goes well. The favourite scapegoat of tenants and the media has to take the rap when the reference interest rate rises and interest-related rent reductions are reversed. Or when service charges rise because energy costs explode. Or when arguments between neighbours escalate because the barbecue season has started. Or when rents rise because supply cannot keep up with demand.
Property managers – or more precisely, the majority of them – have an exciting and demanding task: they have to satisfy two very different categories of customers: their clients, usually private owners and asset managers, for whom they are responsible for maintaining property portfolios and optimising property income, and their tenants, who expect their concerns to be met unbureaucratically, defects and damage to be rectified quickly, annoying neighbours to be dealt with and service charges to be minimised.
This challenging task becomes a burden when clients demand more and more services for less and less money in order to support their returns, and when tenants make ever higher demands because they assume that rising housing costs go hand in hand with a higher level of service and that “no” is not an answer.
The burden has consequences. On behalf of SVIT Zurich, we conducted an online survey of active and former property managers between October 2023 and January 2024 to find out how active managers view the profession, where former managers have moved to and under what conditions they would return to property management.
The answers are sobering. Although 80% of active farmers identify with their work, a majority are considering changing jobs (Figure 1). It is particularly worrying that two thirds of the “seniors” are considering whether they should turn their backs on farming, and that one in nine team leaders has applied for a job outside of farming in the past six months. The sector risks losing its most experienced top performers.
We do not believe that the property industry can afford to lose experienced managers. Owners and asset managers are already complaining that knowledge is lost with every turnover and tasks are left undone. The attempt to ensure continuity in property management with asset managers who have previously worked in property management themselves is understandable – but counterproductive. A blurred division of roles and responsibilities almost always leads to friction, and micromanagement contributes to managers looking for other areas of responsibility.
Tenants also have a lot to lose. It is already being criticised that it is becoming increasingly difficult to find personal contacts behind apps and web forms, and that staff changes are causing concerns to fizzle out. Even the tenants’ association, which likes to portray landlords as “rip-off artists” and urges tenants to challenge rent increases and service charge bills “rather once too often”, should actually know that Switzerland as a tenant country cannot function without knowledgeable landlords.
As difficult as it may sometimes seem, it is possible to make property management more attractive again. We believe that property management companies, clients and industry associations can achieve a great deal with a concerted effort.
Property management companies can do more to relieve the burden on property managers in their day-to-day business and in dealing with large portfolios. In many administrations, work processes could be formalised, simplified, standardised and properly digitalised. Digitalisation zombies could be disposed of more quickly and management deficits could be addressed more actively. Services offered could often be defined more clearly in order to manage expectations and avoid conflicts; if conflicts escalate, managers could often be better protected from hostility.
Clients could become more aware that quality has a price and that property management companies do not have a patent remedy for reducing operating costs with the often elusive – and sometimes deceptive – digitalisation dividends. The fact is that property management has become more demanding and complex, and that maintaining and renewing the building stock requires more people and expertise. Control is undoubtedly necessary in this context, but constructive cooperation is also required. Investing in asset micro-managers is of little use if it creates additional work for the management and takes away necessary resources.
Finally, service providers and industry associations can expand the training and further education programmes on offer to better prepare managers for changing tasks and working methods.
The traditional training path from clerk to property manager assumes that property managers can do everything that could contribute to maintaining the value and optimising the income of the building stock, from handing over rental properties and property accounting to developing maintenance strategies and supporting tenant improvements and renovations, and that three years of professional experience and a specialist certificate are enough to lead a management team.
In addition to traditional all-rounders, the real estate industry also needs specialists who know how the energy and emission intensity of existing properties can be reduced at a reasonable cost, how redensification projects can be implemented without a lot of background noise or how shopping centres can be revitalised. This requires training and further education paths that give lateral entrants and newcomers the opportunity to play to their strengths without having to internalise all of their management knowledge. And there needs to be an awareness that value creation in the portfolio increasingly requires a team effort, in which other experts make a significant contribution alongside traditional property managers.
It is up to the players in the property industry to reward this contribution appropriately.
