Why is a management company essential?

Why is a management company essential?

The Kazakhstani commercial real estate market differs from the Western one in that it is less stable, younger, more risky and therefore more interesting. If for the West the transfer of commercial real estate objects to the full trust management of an external management company is already a rule, then for Kazakhstan it is rather a developing direction.

It is impossible to completely copy the Western model and transfer it to our reality, but certainly it is necessary to adopt and use the standards and technologies existing in the West.

When the owner company makes a decision to transfer real estate objects to the management of an external management company, such changes require the maturity of the company itself, readiness to accept such changes.

The main goals pursued by this step are to increase profitability, focus on the owner's internal business processes, optimize the internal structure, obtain a more flexible facility management system and free up the necessary resources for the implementation of new company projects.

So, management of commercial real estate should be understood as a set of measures aimed at increasing profitability and reducing the risks of ownership.

Typically, management services include:

  • Lease management
  • Marketing promotion,
  • Administration,
  • Legal and financial services,
  • Technical operation,
  • Ensuring security,
  • Cleaning and landscaping
  • Waste management, etc.


At the same time, services aimed at generating income are usually referred to as Property Management (PM). Services aimed at managing the facility's infrastructure are referred to as Facility Management (FM).

The process of integrating with a management company may not be easy and may require effort and managerial will on both sides.

Flexibility, responsiveness, the ability to hear your client and offer the best solutions to problematic issues, a professional approach to business, a focus on results - this is what is expected from a management company.


What stage of the project is a management company involved at? Today, many do not fully understand where the area of responsibility of the consultant ends and the area of responsibility of the management company at the facility begins.

Often the tasks of consulting, brokerage and management are performed by the same company, which has a specialization in only one of these areas.

This approach can lead to serious errors. Only a clear distribution of functions and responsibilities between the consultant and the management company at each stage of the life of the facility will allow us to build not only effective work, but also fully meet the expectations of the investor.

The work of a real estate consultant begins at the moment when the owner decides that he wants to invest in the land. The consulting company should give recommendations on the functionality of the future facility, assess all risks, payback periods, etc.

At the same time, a well-prepared business plan becomes the area of responsibility of the consultant. An important role at the time of provision of consulting services is played by the involvement of a management company, which should, at a minimum, determine the cost of management and maintenance services of the future facility.

At the same time, there are management companies that have the expertise of consultants, so both functions can be performed by one company.

As soon as the owner agrees on the business plan and proceeds to the construction phase, the general contractor, designers, builders appear on the site, and there is also a consulting and management company that must zealously ensure that the initially recommended concept is followed.

During the construction phase, the management company must monitor the process in terms of subsequent management and operation. Their area of responsibility automatically includes control over the availability of all documentation, installation of equipment and engineering systems, over the presence of acts of hidden work and certification of building materials. Indeed, after the completion of construction, it is the management company that subsequently implements and updates the initial business plan for the current market conditions, in particular, sets rental rates, controls the timeliness of fulfilling contractual obligations, works with tenants, etc.

Therefore, only following a clear and well-coordinated algorithm from making a decision on construction to current management, the project becomes a liquid asset that brings a stable income.