Property management companies started experiencing difficulties in collecting rentals, resistance to rent increases, declining turnover-based rentals, rising vacancies, massive electricity cost hikes in 2009, so MDA Property Systems started 2009 with caution, says director Deon Keet.
As the year progressed, MDA witnessed a rapid slow-down in business activity, says fellow director Willem Potgieter.
“This affected business activity in southern Africa and the Middle East, where we have various software installations, and where capital expenditure was frozen almost overnight,” says Potgieter.
The directors realised they had little control over the global slowdown and needed to look for opportunities. Keet says the company had made good use of the slowdowns after the political turmoil leading to the 1994 elections and then the Y2K bubble and the 911 repercussions. So they knew this time around there would again be opportunities. The challenge was to identify them.
Potgieter says the business grew substantially during the boom period of the property industry, so they realised there had to be sizable sales and training opportunities among existing clients.
“We had the time to carefully plan and execute value added proposals to clients, to improve property management efficiencies. This was mostly done by implementing unused or underutilised features of our software. Important processes such as EFT payments, auto reconciliation of cash books, call centre and facilities management, had to be streamlined. Where third party accounting software was still in use, many clients could see the benefits of implementing the MDA integrated and real-time financials.”
Keet and Potgieter say the downturn has renewed focus on the advantages and disadvantages of outsourcing property management. The owners of smaller portfolios have tended to outsource management. Large portfolio owners, on other hand, have tended to bring the management in-house. There also appears to be a new trend by large-scale occupiers to outsource the function to professional property management companies. These changes create opportunities for MDA.
“Over the medium to long term MDA’s fledgling business in the Middle East is likely to benefit from the recent crisis in that region. Tenants cannot survive with the generally applied lease terms of paying rental annually in advance. The administrative burden of billing rentals and operating cost recoveries monthly will make MDA’s systems and know-how compelling.
“Whereas 2009 gave us the space for thinking, learning, consolidating and encapsulating our know-how, we are quietly confident of a prosperous year ahead,” says Keet.
Call 0861 0022 31 or visit www.mdapropsys.com.
