Risk management in real estate
What keeps real estate managers up at night?
I read this in the paper the other day: ‘Good Property Management should be supported by an efficient, Readily available Income base complemented by a Strong Knowledge Management Process’. I think for a bit and I try it again, trying to read between the lines this time: ‘Good Property Management should be supported by an efficient Risk Management Process’. That’s more like it.
Since the 1970s, TV series have been ‘planting’ hidden commercial messages in their scripts to capture the customer. Back then, regulation was light so statements like ‘do you want a Coke or a Pepsi?’ could easily slip into a script. Nowadays, the average consumer is smarter and may be too sophisticated to be interested in such a plain message process. Media businesses have found other ways to be successful in communicating such ‘read between the lines’ messages.
One way would be by introducing amazing new technology which is later made commercially available by one of their sponsors, using a sequence of images or words which directs the mind into thinking ‘oh, I want some chocolate now’, or ‘I always wanted to go to
Of course the question is: ‘how all this is related to risk management in real estate?‘ Undoubtedly, the real estate industry has been one of the key drivers in the globalisation of capital over the past fifty years. The recent global recession, prompted by over-leveraging in many sectors including real estate, has resulted in increased focus on risk and stress across the real estate industry, and risk is now at the top of the agenda for owners, developers, managers, investors and, of course, regulators.
REflexions issue 1 - April 2015
REflexions is a bi-annual digest, dedicated to the real estate investment management professionals, which brings you the latest articles, news and market developments from Deloitte’s professionals and clients.