The 8th Stage of Development Management
The final stage for discussion is Facilities Management and Lifecycle Considerations.
This stage tends to get overlooked by most “build and sell’ type developers as they have no vested interest in the performance of the asset over the longer term. But if you’re an Investor or a long term holder of the asset, then it becomes essential.
Facilities Management refers to the day to operation of the asset. This applies particularly to large multi-tenanted assets such as shopping centres or offices where large common costs are apparent such as energy, plant, equipment and common floor areas.
Life Cycle Management refers to the performance of that asset in an overarching portfolio over a period of time. This includes the consideration of such things as –
Interest rate risk
Market movements
WALE (Weighted Average Lease Expiry)
Capital improvement cost
Operating capital
The strategy of the Portfolio as a whole
Some key items to be clear on when considering Facilities and Lifecycle Management include –
Understand the clients’ investment intent
In the development phase consider short term Capital Cost saving measures compared to the impact on longer term maintenance costs
Have a great long term Management Team
Put in place specific and bespoke Reporting protocols
Provision for Capital sinking fund items
There are many more issues and much more detail that can be entered into, but the above at least gives a very brief overarching guide.
