Strata Managers Benefiting from a Buoyant Market

Macquarie’s 2016 Strata Management Benchmarking Results has revealed a drive towards specialisation, evolving business models and a strong outlook as the three factors shaping the industry’s future.

Macquarie Business Banking recently conducted a survey of 202 businesses nationally, building on the insights from previous reports in 2011 and 2013, to identify the trends shaping the rapidly growing Australian strata management industry.

The survey revealed that strata businesses across the country have benefited from buoyant market conditions, with 86 per cent increasing revenues in the 2015 financial year, reflecting ongoing growth across the industry.

Tim MacKenzie, National Head of Strata for Macquarie Business Banking, said strata managers are driving higher growth by operating more efficiently.

“Strong systems are allowing businesses to scale up while also keeping costs under control,” Mr MacKenzie said.

“We’re seeing high profit businesses investing in productivity, including staff training, technology and systems to support client service. These businesses are evolving their business models and seeking to streamline their systems to provide a more responsive service at a lower cost.

“Firms are supporting their strata managers with higher numbers of administration staff, allowing managers to focus on relationship management rather than day to day service delivery, leading to improved productivity.”

Mr MacKenzie said high performing businesses tend to focus on facilities management, property management and utilities, with 44 per cent of businesses planning to add new services over the next three years.

“It’s important for businesses to position themselves for future opportunities, with new developments already in the pipeline set to underpin growth over the coming years,” he said.

“The research has also highlighted the benefits of specialisation, with high profit businesses more likely to create a specialised value proposition and focus on either a large or small scheme, rather than trying to cover both.

“More sophisticated developments have created new scope for specialist providers catering to large, high-value schemes. At the same time, small scheme specialists are carving a profitable niche by providing a highly efficient, standardised service.”

The vast majority of businesses are optimistic about the year ahead, with 85 per cent forecasting higher revenues in the 2016 financial year.

“High profit businesses said staff retention, quality service and strong client relationships will help them to underpin future growth. Almost one in two businesses (49 per cent) will look to hire as they scale up to keep pace with an expanding market,” Mr MacKenzie concluded.

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