Independent body to oversee property management
21/01/2006 NST-Prop By G. Umakanthan

The practice of property management must be brought under the control of an independent body that is empowered to take action against anyone who threatens public interest.

Such a step will also increase the integrity and transparency of the capital market, Deputy Finance Minister Datuk Tengku Putera Tengku Awang said.

Speaking at the convocation and dinner of the Board of Valuers, Appraisers and Estate Agents (BVAEA) in Kuala Lumpur last week, Tengku Putera said only suitably qualified persons should carry out property management as it is a complex task, with the duties differing from one building to another.

This issue of professionalism, he said, has become more pertinent with the rapid growth of a key investment area in the country - Real Estate Investment Trusts or REITs.

REITs have made property management, which involves at least four specialised management tasks - tenancy, maintenance, contract and financing - more important.

“If property management is left to the manager of a REIT, it will in the long run only create problems,” he said.

“REITs have opened opportunities for more investors to enter the property market, which is the most important sector in the development of our country’s economy.”

There are now six companies listed on the main board of Bursa Malaysia that can be categorised as REITs, and this is expected to grow.

“REIT investors derive their returns on investment from a property’s recurring rental income, and this makes property management an important discipline,” Tengku Putera said.

“Therefore, there must be controls over property managers to ensure they are responsible to their clients.”

He also said that property management plays a key role in the public sector as well, but so far, the focus is on maintenance instead of management as a whole.

“There must therefore be a move towards implementing holistic property management, and this should begin with the creation of an inventory of Government properties.

“Though it may seem difficult, it is necessary.

“I hope the National Property Information Centre and the Valuation and Property Services Department will take the initiative to enable the Government to legislate and strategise policies concerning property management,” Tengku Putera said.

Some 600 people attended the BVAEA convocation and dinner, during which two valuers were honoured for their contributions to the profession.

Khong & Jaafar managing director Elvin Fernandez was named BVAEA’s “Property Consultant of the Year” while Azmi Ariffin of Azmi & Co was honoured for his “Contribution to the Valuation Profession”.