Khidmah braces for busy year ahead

Project management services take on a key role in a maturing market

Image Credit: Kishore Kumar

The progression to a mature market has put the brakes on developers' asset creation frenzy, which, in turn, has been substituted by prudent management of existing units. Though few Abu Dhabi developers went overboard with ambitious projects, unlike their Dubai counterparts, the ones that have survived the market adjustment have now changed tack to add value to their built project portfolio.

A one-stop shop for property management services, Khidmah fits perfectly into this new scheme of things in the UAE capital.

While competition is slowly taking shape, Khidmah has already snapped up management contracts at residential communities, both on and off-island, such as the Khalidiya Village, Sas Al Nakhl and Golf Gardens in Abu Dhabi and Al Oyoun Village in Al Ain. The upcoming Sun and Sky Towers on Al Reem Island, the Khalidiya Corniche Tower, and the Lake Shore Tower in Dubai are additions to its expanding portfolio.

"We aim to increase these service offerings in Abu Dhabi, Al Ain and Dubai. Currently, we have put out proposals to potential clients in these markets," says Sutton Turner, chief executive of Khidmah.

 

Increase in manpower

Going by the market pulse, Khidmah's management has increased staff strength from a paltry 20 to more than 800.

"We travel to India, Nepal, Philippines and other locations to directly hire our workforce. We currently do not see any other competitor offering the wide variety of services in-house like Khidmah does," says Turner.

He pegs the projected employee headcount at 2,000 by the end of the year. "It will be a busy year, but we are really looking forward to it."

Clients communicate with a single point of contact — Khidmah's 24/7 call centre — fast-tracking grievance resolution, he says. In addition, all services are performed in-house, thereby cutting costs.

"We can beat anyone's price in the market. For example, we currently charge Dh6.26 per foot at Lake Shore Towers in Dubai and Dh5 per foot at Golf Gardens in Abu Dhabi. All competitor properties around us are 20 to 40 per cent higher," says Turner.

Khidmah's services are not only confined to maintaining the communal elements in master communities. Individual management agreements which are entered intowith homeowners require that thefirm undertake snagging and preventive maintenance.

"For instance, we are currently in charge of the community management of Golf Gardens. Besides maintaining the community pools, landscaping and maintenance, 80 per cent of the property owners have signed individual management agreements with Khidmah to maintain their pools, and for preventive maintenance, and so on."

 

Recycling initiatives

The transition to a more mature market is seeing developers adopt international best practices, including some that are environmentally responsible.

"We currently have recycling on many of our properties. Our leadership has sustainability training and experience," says Turner.

With the onus now on project longevity, property management firms are being involved right from the conceptual stage, a practice earlier overlooked. Khidmah is currently associated with 15 properties in the design and construction stage. "Maturing markets always reveal lessons learned. We are really able to reduce operating costs and increase the life of a property by being involved earlier in the process."

However, for other properties in which Khidmah was roped in after completion of construction, Turner underscores the importance of maintaining sufficient preventive maintenance funds.

Spending large sums on building improvement helps increase the property lifespan, reduces operating costs and retains the unit value, he explains. "We live in a harsh environment where properties deteriorate over time dueto heat, sand and wind."

With strata regulations still some way off in both Dubai and Abu Dhabi, homeowners, developers and property management firms are given afree hand at forming an informal operational framework.

While strata disputes are becoming commonplace in Dubai, matters have not reached a flashpoint in the neighbouring emirate, with several communities still bracing for imminent handover.

With the experience garnered from the past year, Turner claims that homeowners are willing to pay a fee for quality services.

"However, they want value for the fees they pay. If they are paying for a lifeguard, they want a trained lifeguard on duty... They want a clean swimming pool. They want well-maintained landscaping."

Sensing that property management is the latest fad, several inexperienced firms have also joined the fray.

"I don't think strata management will be understood until it is fully deployedin Dubai or Abu Dhabi," says Turner. "I am shocked by all of the companies that have sprung up. It is not that biga deal. You have an annual meeting. You have open book accounting of expenses to the owners' associations and the owners know what services they receive for their annual fees. Strata management is a normal practice in a mature market and a cost of doing business in the property management business."

Value-added service

"Khidmah was created prior to the credit crisis by our shareholders who saw a value in the long-term benefit of taking care of their properties as well as offering these services to others. Credit crisis or no credit crisis, Khidmah would still be a reality today."
Sutton Turner, chief executive, Khidmah

 

For information on the real estate sector, within the UAE, please visit our sister site, getthat.com.

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