VICTORIA Mutual Property Services (VMPS) CEO Allison Morgan is cautioning developers that although there’s brisk business in commercial real estate, players who don’t understand the market may be left with empty buildings.

“You can’t just build a better mousetrap and they will come. Location really matters,” she told the Jamaica Observer’s Real Estate on the Rock.

“Most persons who are establishing a commercial business do so with the intent of having clients visiting them. So you have to think about access to major roadways, access to supplies, the infrastructure supplies, et cetera,” she added.

Established 34 years ago, VMPS is the real estate arm of the Victoria Mutual (VM) Group. Morgan, who has years of experience managing VM branches in the Corporate Area and St Catherine, is also a member of the Realtors Association of Jamaica’s (RAJ) advocacy and lobbying committee.

Drawing on her wealth of knowledge, she also stressed during a recent interview with the Sunday Observer that it’s vital to determine the type of client you wish to attract before putting up commercial space, as that will influence decisions about the structure. A building designed to house clients in the business process outsourcing (BPO) industry, for example, is very different from one that will be used as a restaurant.

“If you’re going to do a BPO that caters to the financial sector, then the client is going to have strict regulations about how many persons can be in the floor where you can have access control. You need to determine what type of building you are going to be constructing, and for what type of clientèle,” she advised.

“If you’re going to operate a restaurant from a building, you’re talking about… even simple things such as the type of grease trap and where you have the kitchen sink set up. A commercial kitchen set-up is absolutely different from a kitchenette for a corporate entity running a nine-to-five business. So I would say to developers, ‘Understand your market, understand what you need to build, and then design your building accordingly’, ” Morgan urged.

The VMPS CEO noted that there is especially strong interest in warehousing space near wharves and ports, and again cautioned developers that these types of facilities have specific requirements.

“The challenge that we’re having is that warehouse space must come with enough space to facilitate container off-boarding and unloading. You need to have enough space in there for a 40- or 50-foot container to get a turn radius and to back up. And then you have to think about the type of warehousing. Is it cold storage? Is it for agricultural produce?” she explained.

Once the commercial space is up, VMPS clients may take advantage of its property management services which, in turn, can help maximise their investment. For example, all VMPS property management clients benefit from VM Group’s focus on sustainability. As Morgan noted, many clients are naturally leaning in that direction.

“We are seeing a heavy emphasis on ESG [environmental, social, and governance] initiatives and are trying to ensure that we have climate-resilient buildings, either by new construction or by modification, to ensure that we can play our part,” she said.

This ties in with another noticeable trend: making buildings smart.

“Instead of using people, you can now have a further geographical reach when you use smart systems to monitor, for example, a building management system, which is one of the things that we employ at VM Property Services,” Morgan noted.

“I can stay in head office in Kingston and see electricity usage right across all the buildings that we manage across Jamaica. I can see if an air conditioner is left on over the weekend when it should not be. I can shut it down remotely. I can monitor it so I can also help to save funds for the building owners. Geographic distance will always be a factor for property management, so we’re looking at smart building usage, implementing the technology that will help us to be resilient and robust and to respond quickly to challenges, and ensuring that the buildings are resilient for climate change,” she added.

VMPS dedicates about 40 per cent of its time to providing property management services for commercial clients within the wider VM Group. These clients are mostly located in Kingston and St Andrew, with a handful in other parishes across the country where VMBS has locations. Morgan explained that property management covers “hard services” such as janitorial, pest control, regular servicing of equipment like the heating, ventilation, and air conditioning system, elevator, transformer, and generator. It also covers “soft services” including security guards, garbage disposal, monitoring for carbon monoxide and air quality tests. Fees are determined by a range of factors, including size of the building, number of storeys and the suite of services required.

She said the uptick in demand for commercial space has been accompanied by increased need for property management.

“Where you have commercial spaces where persons are operating businesses and professional centres, and you have a high concentration of bodies in an area, then that is where you have a great demand for property management,” Morgan told the Sunday Observer.

On the other hand, clients whose core business is not customer-facing tend to keep property management in house; and there are other factors.

“They try to self-manage, and the reason for this is because of the uniqueness of each type of business. If you want a property manager because you are exporting agricultural produce, you are going to be hard pressed to find someone that has the experience of property management and agricultural oversight. What most companies do is they have the SME [small and medium-sized enterprise] and then they add the property management to it, or they mirror it with just taking on an engineer that can give them the guidance,” said Morgan.

“We directly impact the financial gains for those properties that we manage in several ways, the most obvious one being the maintenance of the building to increase the equity appreciation and, of course, to try and get the buildings to a Class A state, if possible, thereby ensuring we can stay abreast with market charges for both rent and maintenance,” she added.

Whether a developer chooses to manage a commercial property or hand that task over to a property management firm, Morgan is clear on one thing: “It’s important to consider real estate as the gift that keeps on giving, whether it’s for your personal portfolio or for a commercial portfolio. If you look at history, there have only been two things that have been proven to withstand time and economic shocks, and that is investment in the stock market and investment in real estate. But, understand that both are the long game,” she said.

Space has to be specifically designed with an eye on intended use.

Smart building technology makes it easier to monitor property in wider geographic locations.

MORGAN… it’s important to consider real estate as the gift that keeps on giving