A thought leadership piece published as a LinkedIn Article. As is frequently the case with expert articles of this kind, this piece was largely a rewrite of my client’s own draft, in which his knowledge and expert insight in for the content, and i simply bring my skills as a content writer to bear to build an engaging and informative piece from that. LinkedIn article for CEO of proptech developer Gigabyte Software.*If no image of the finished project is available, my .pdf copyvisual or .docx copysheet is shown in its place.
Who’s Going To Save Residential Management From Paralysis by Polarisation?
You get a bit of a wake up, if you map players in the residential property management sector by the number of units under management, and stand back to consider the chart you’ve drawn.
At one end of your chart: very few firms managing very many units.
At the other: very many firms, managing relatively few.
In between? Not very many at all managing a portfolio with a scale and rate of growth that suggests an dynamic and influential presence in the market in the years ahead.
Between the large, 20,000 or more units agents and the minnows, each with a handful of blocks, there’s a paucity of robust, medium sized managers with the scale, systems and resource to matter, but the agility and hunger to do a great job and, just as importantly for the industry, keep the sector giants on their toes.
Consolidation at the Big Manager end.
We learned last month that the UK’s largest property management company, Firstport (which looks after more than 196,000 homes across 3900 developments) has merged with Mainstay (80,000 homes). The apparent management Godzilla this creates might be viewed as confirmation that consolidation of the sector is underway and that this polarisation to a market of ‘monsters’ and ‘minnows’ is solidifying.
Recent institutional investments into Crabtree, Warwick Estates and Remus, viewed alongside a plethora of smaller acquisitions, seem to add weight to this view. Yet for every merger, acquisition or investment at the large end of the market, a healthy flow of startups and wannabes continue to announce their arrival at the smaller end.
This is not so hard to understand. Until such time as regulation, which seems to have been on the horizon for years (delayed for a while by Brexit and now perhaps again by Covid) actually arrives, barriers to entry into the residential side of property management remain appealingly low.
An attractive market for new players.
If you are a smart, ambitious, relationship-owning exec who is frustrated by the way your employer treats you or makes it possible you to service clients, or who simply feels you could build greater financial security for yourself than you have currently, stepping into the market is an appealing option.
Equally, you may simply take the influx of institutional money into the sector as confirmation that there must be a decent profit margin and a reasonable element of safety about the main income streams, and so treat this as a green light for the inclination you have to give it a go on your own.
(As it happens, the sector’s margins and risks tend to favour large and small players, rather than those attempting to navigate around the middle ground, and this may create a barrier that your fledgling business will have to overcome if it’s ever really to fulfil your dreams.)
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