Go one better
In conjunction with MBI Ltd, Dubai’s Better Homes Properties has established a dedicated facilities management company. FM Magazine talks to the senior management of the new entity about how and why they set up.
In tandem with the growth of Dubai’s freehold property market is a rising interest in facilities management. Property developers and property management firms are progressively more aware of how good quality building services provided at a reasonable cost can be the differentiating factor in a customer’s decision to invest. Not to
mention the benefits of having FM consultants involved in the design of projects, of having planned preventative maintenance schedules or energy management programmes.
The response has been the emergence of a number of new FM players in the market. Some have had long experience in FM elsewhere, while others have built expertise in related industries and found it too good an opportunity to miss. Better Homes Facilities Management falls in the latter category.
Along with Contracting and Interiors, Better Homes Facilities Management is one of three divisions of Better Homes Engineering LLC, which is a 50:50 joint venture between
Better Homes Properties Ltd and Mills Bowley Investments (MBI) Ltd. Better Homes Properties is one of the foremost real estate companies in the UAE.
“Philip Mills, my business partner, and I met Linda Mahoney [Managing Director of Better Homes] some time ago and it just came up in conversation that Better Homes had this small works business that they’d had for about 14 years,” explains Terry Bowley, managing partner of MBI. “Linda saw it more as a service to support the property business rather than a business in its own right. She saw the potential of a facilities management business. Clearly, there’s a lot of potential opportunity there with the fact that Better Homes are in the real estate sales, letting and property management business.”
Mills' background is in FM. He previously worked for hotel chain Jumeirah (formerly known as Jumeirah International), in both the Burj Al Arab Hotel and Jumeirah Beach Hotel as well as being one of the chief engineers on the Emirates Towers project. Mills and Bowley themselves met about two years ago and decided to join forces to set up a
small group of businesses in related fields. Mills Bowley Concrete Products (MBMix) was the first business, going into production in October 2004. With it apparently doing very well, Bowley has turned his attention to the new FM entity.
“Linda and Ryan, who’s her son, saw the opportunity for FM but didn’t really know how to progress it themselves,” continues Bowley, “because obviously it’s not their field. So as it came up in conversation, we said ‘Well, we have expertise in facilities management. We know a lot of people in the business. What about doing something together?’”
We're hoping to carve out a niche in the market for ourselves as an independent FM service provider, rather than being linked to a specific developer. I think there's room for an independent.
Given the sheer rate of development going on in Dubai, it was clear to both parties that existing facilities management services companies, whether tied to major developers or not, would not be able to cope with the amount of property coming online. “We’re hoping to carve out a niche in the market for ourselves as an independent FMS provider,” says Bowley, “rather than being linked to a specific developer. I think there’s room for an independent.”
“What we want to do is to try and offer a superior service. I know everyone says that – it’s a bit of a cliché – but we really do. Just as we do in the concrete business. We’re trying to build a management team that can compete at the higher end of the facilities management business without pricing ourselves out of the market.”
Better Homes and MBI agreed that Better Homes’ small works business would be integrated into the new JV, Better Homes Engineering. William Leeman and Ivan Brinkley, both former Jumeirah FM men, were brought in to set up the new company’s structure, policies and procedures.
I came from hotels, which are quite well run and well documented with policies and so on, to the outside world to find absolutely nothing, zero. I mean there isn't a good facilities management company working out here.
“It was very interesting to see the Dubai FM market from outside the hotel system,” says Leeman, Managing Director of Better Homes Engineering and Chief Operations Director for MBI. “I came from hotels, which are quite well-run and well documented with policies and so on, to the outside world to find absolutely nothing, zero. I mean there isn’t a good facilities management company working out here. People will disagree with that. I think they are evolving or developing and there will be good ones. There are one or two key players that have been around a long time. But it’s still not slick.
“There’s a culture gap between Europe and here because of the difference in wage structures that you’ve got. That doesn’t mean to say that it should be worse, because there are some extremely skilled people out here – and we’ve got a few of them. But the general course is ‘Well OK, that’s what you pay so that’s what you get’. I think now that that’s changing. You can’t keep doing maintenance with a guy with a screwdriver and a pair of pliers – it doesn’t work.”
By Leeman’s own admission, Better Homes Facilities Management is easing its way into the market, not wanting to bite off more than it can chew too early on. The company has contracts with a number of individual villas and several high-rise blocks. Its in-house staff undertake all services related to HVAC [heating, ventilation and air conditioning] and MEP [mechanical, electrical and plumbing] while other services – such as cleaning, security, grounds maintenance and fire safety - are subcontracted.
As Better Homes leases and manages property on behalf of clients, the company cannot guarantee that its FM division will be appointed in every building they manage. Clients may have their own preferences. Besides that, as a separate business entity, Better Homes FM must compete with other players in the market. But there is a strong synergy between the property division and the FM side. “This is a marriage of Better Homes’ existing property managers and the facilities management team,” explains Leeman. “They’re actively looking to promote us as a company within the same parent company to get the business as well. But again, it’s down to tender. Three quotations, the usual, and if their landlord or owner likes someone else more than us, then so be it.”
Neville Bulsara, appointed by Leeman as General Manager of Better Homes Engineering, believes the company can also get a lot of business from the bigger developers outsourcing services. Having worked in FM in Dubai for the past 11 years, and 16 years in Oman before that, he can gauge well the explosion of demand for facilities maintenance and management in the region.
“The whole aspect of property development has changed with ownership of properties,” explains Bulsara. “Traditionally, an owner built a property to rent it, make his money in a few years’ time and that was it. So he looked for the cheapest maintenance and cleaning company to maintain it. All that has started changing and there will be a drastic change in another year or two when all these towers come up. We are talking about the world’s biggest this and the world’s best so and so. How are they going to maintain them with the same infrastructure that Dubai had five or 10 years ago? It’s not possible. So we are evolving along with the market.”
Bulsara sees that homeowners in Dubai will become much more discerning in their choice of property according to maintenance standards and service charge rates. Both Leeman and Bulsara have a lot to say about service charges, and the importance of accurately determining them before properties are sold off-plan. This is to the benefit of both the property developer, who will then have a better understanding of lifecycle costs and return on investment, and the homeowners, who will know exactly what expenses to expect.
“If we can get in before the actual construction and convince the owner that we can tell him realistically what it’s going to cost as a service charge per year to the customer, there are no shocks,” says Leeman. He adds that having one company from design through to operations would be beneficial to everybody as there would be no transition period from one firm to another.
Leeman says they are still faced with the problem of trying to convince landlords and building owners of the benefits of good maintenance. With rents in many existing buildings rising by a third or more over the past year in Dubai, he sees little of that extra money going into the properties and into improving maintenance for tenants. A point that is backed up by the expatriate population at large who are becoming increasingly frustrated with ‘greedy landlords’ hiking up rents unilaterally while providing no extra benefits. Assuming Dubai’s property market does eventually correct itself, one can only hope the conventional economic principles of supply and demand that can be found in more mature markets will come to fruition here. Residents then would become more empowered to influence the levels of service rendered. In the meantime, the presence of more facilities management companies in the market can only help this cause.