Knowledge-based property management increases property values

Knowledge-based property management increases property values

Lassila & Tikanoja Oyj (L&T) has been developing an energy management center for property management within the framework of the Indoor Environment Program. This knowledge-based solution not only saves energy but also increases the value of a property: a 25 percent reduction in energy consumption translates into a 7 percent rise in value.

Good indoor conditions are crucial for both energy conservation and permanence of tenants. They can be monitored via an energy management center established in Kuopio which remote monitors the technical building systems of a couple of hundred L&T client properties across Finland. The aim is to find the most energy-efficient way of managing and using properties with it.

– Knowledge is the foundation of good property management, says Antti Toivanen, Business Manager, Professional Services at L&T. – Yet, it is not an end in itself; what is done with the knowledge is most important. That is management by knowledge at its purest: how accumulated knowledge can be transferred to service technicians in the field is crucial – how we can have an HVAC engineer in the furnace room of every building.

L&T has trained eco-savy service technicians with that in mind. Systems are continuously becoming more complicated and require more know-how. Yet, development of attitudes in the right direction is even more important than technical know-how: we must learn to observe and discern: engineering expertise must be made part of daily routines.

– The ease of remote monitoring is also a drawback in the markets, Toivanen continues. – Anyone with a laptop can have their own remote monitoring center these days. But that is not enough – it is not a question of technology, but the way something is done. The property owner wants more complete information, not mere observations but analyzed information and conclusions drawn from it. It is not sufficient just to tell clients that something is broken, they also need advice on how to fix it.

Real-time monitoring of information also helps longer-term planning of property maintenance as it keeps people updated about measures undertaken with respect to the property and those scheduled for later. It allows monitoring whether observations have been made and the measures required by them have been initiated, are underway, or have been completed. That would be much more difficult following the traditional model.

Property investors need to wake up

It is easy to understand how wise property management saves maintenance costs. Its capacity to increase the value of a property significantly, on the other hand, is less apparent: good indoor conditions make tenants satisfied, which leads to better yields and, consequently, higher property values. It is surprisingly difficult even for a professional property investor to determine which is more important: to cut individual property maintenance cost items or invest slightly more in some phases which will bring manyfold economic benefits in the form of increased property values.

Toivanen finds that the Indoor Environment Program has been highly beneficial for L&T. Especially its multidisciplinarity and the cooperation with research institutes proved rewarding: – Putting leading-edge sector research into practice promotes a company’s own business and the entire sector.

The SHOK model allows cooperation with competitors. – In our field, it is especially easy since property management is not rocket science and does not have great secrets, Toivanen says. – As concerns the future of SHOKs, it might be worthwhile increasing both their number and mutual cooperation. The common goal of all is to do things in a new way and rationalize processes.