Buying interest is becoming higher in projects that utilize technology. Many major real estate investors affected by Covid-19 are considering integrating more 4.0 technologies to develop a clear competitive advantage.
A key priority for younger apartment buyers, or renters, is the application of smart technologies in building management. During Covid-19, when safety became paramount, management technology played an important role in social distancing, while reducing costs, and saving investor and management board time.
Reviewing the growing technology trend in real estate after the second Covid-19 wave, Ms. Do Thi Thu Hang, Savills Hanoi Director of Advisory Services, said one solution to help businesses overcome difficulties while preparing for the future is reviewing and finalizing technology in project ecosystems.
“Buyers look for new products with integrated health care facilities to ensure safety with convenience. This is encouraging larger investors to consider upping technology levels in operational management and throughout the project itself. Developers delivering higher invested, more professional products will make the difference in future. For moderate capacity developers, it is advisable to consider integrating 4.0 technology as much as possible”, explained Ms. Hang.
In the second half of 2020, about 39,600 apartments from 28 projects will enter with Grade B continuing to lead supply. Ms. Vu Kieu Hanh, Savills Hanoi Head of Property Management, said this large supply represents an opportunity for property management companies, however, delivering constantly efficient operations is not that easy.
“In Vietnam, embedded business approaches and market development has real estate management units mainly providing maintenance, cleaning and security services. An apartment building management board has the board of directors and staff requiring expertise and skills regulated by the Ministry of Construction. The management unit also undertakes internal, external relations, human resources and investor-to-building management finance activities. Investors are tending to choose professional management units applying modern technology” said Ms. Kieu Hanh.
With over 40,000 apartments in over 110 projects managed by Savills Vietnam, the workforce has reached 1,700, which is higher than in other countries. Ms. Kieu Hanh said: “It is difficult to adjust service fees in the current situation, while operating costs such as wages, electricity bills being adjusted several times by the Government since 2015 has increased pressure on property management. Utilizing technology in property management increases management process effectiveness and optimizes operating costs”.
In addition, the average property management directors in Vietnam is between 40 and 50 years old. From a younger perspective, these positions require long experience, leading to property management receiving less attention than other industries. The technological factor is a challenge but also an opportunity for management units to improve service quality and establish a competitive advantage over projects still under the more traditional approach. Technological changes will help attract younger people to this field and expand career opportunities.
“Technology is an inevitable trend and will define longer term development of the real estate industry in Vietnam. At projects managed and operated by Savills Vietnam, technological factors such as the Property Cube management software are considered as added value for investors and residents. Savills has no intention to commercialize the Property Cube system”, said Ms. Kieu Hanh.