New JV eyes Dh2b property maintenance market in UAE

DUBAI — Annual expenditure on property maintenance in the UAE is estimated to be about Dh2.2 billion ($600 million) and a joint venture between Prudential Investment Company of Australia (PICA) and Dubai-based National Properties is aiming to take 'substantial chunk' of this, said John Nagle, managing director of FEXCO — a provider of global payment services and processes and owner of PICA.

By Lucia Dore (Assistant Editor, Business)

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Published: Wed 12 Sep 2007, 9:08 AM

Last updated: Wed 12 Apr 2023, 1:42 PM

The Dubai-based company will be known as BCS - Strata Management Services.

Speaking at the launch of the joint venture, in Dubai yesterday, Nagle said PICA had a "very competitive" market-entry strategy and had a wealth of experience to help manage properties in Dubai's booming real estate market. The formation of the joint venture, the first strata and facilities management company for developers, homeowners and tenants in the UAE, comes ahead of the introduction of Dubai's Strata Law (or Condominium Law), which is currently at draft stage, and is expected to become law in coming months.

BCS, the strata management subsidiary of PICA launched in 1972, is Australia's largest in the sector and the seventh largest in the world. It holds approximately Dh600 million in trust (escrow) accounts on behalf of owners across Australia, PICA's CEO, Greg Howard said.

In respect to the introduction of the new Strata Law in Dubai he said: "In Australia, we are one of the early founders of the Strata Law and we don't see any difficulties here, adding" "We will do what we can to enhance the law and work with the government (in Dubai)."

Strata management refers to the day-to-day running and upkeep of a building or a group of buildings in a development, particularly common areas and facilities often owned and managed by authorised owners' associations (or body corporates). The rapid development of "communal buildings" in Dubai- residential, retail, and commercial — is accelerating the need for formal arrangements to ensure proper management of buildings.

Nagle said: "A dynamic, maturing property market like the UAE needs excellent strata management protocols to ensure sustainability and good relations between tenants and landlords. Strata management also helps owners by protecting property value, while for tenants it ensures a properly maintained environment."

As for service charges, he said, "transparency is key". BCS provides owners' associations with detailed income/expenditure report and these charges vary depending on the age and type of building, he said. BCS will also be building up a database of accredited contractors in Dubai.

In Australia, a leader in strata management and one of the models upon which Dubai's laws are likely to be based, there are by-laws in respect to particular buildings. These by-laws govern concerns such as behaviour, pets, storage and noise — concerns that often cause tension between occupants, explained Peter Crogan, CEO of BCS-Strata Management Services in Dubai. Similar by-laws could be introduced in Dubai.

He also noted that owners who want to manage a building themselves tend to be short-term investors and do not want the costs associated with it. And if a building has low cash reserves available for maintenance, prospective tenants can be put off, he said. "We actively push for enough finance in the building."

CEO of National Properties, the wholly owned real estate subsidiary of National Bonds Corporation, Adel Ahmed Lootah, said BCS was an obvious choice for a partner as it is one of the best providers in a very specialised sector.

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