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Increased use of technology in the UAE's real estate services sector could reduce labour costs by 20 per cent and eliminate costly mistakes.
Neal Gemassmer, Vice-President of US real estate investment and property management software solutions company Yardi Systems, says there is ''a lot of room for mistakes and additional costs'' in the traditional ways real estate companies handle processes. ''This is due to lack of real estate specific lease, property and financial management systems,'' he says.
''A lot of the back office in the Middle East is very manual. There's a lot of potential for error at multiple points of manual input and disparate IT systems.''
Current systems are based on separate financial account and property management, or manual data entry, including Microsoft Excel spread sheets, as opposed to specific programmes that integrate both management and financial aspects and provide a single data point, Gemassmer explains.
''Many developers that sell residential units have manual processes and lack integrated real estate operation platforms.''
Gemassmer says many companies currently use Excel to manually record unit purchases, deposits, rental payments, lease renewals and maintenance requests. This causes problems when information isn't shared by individuals or existing data stays siloed, increasing the risk of data inconsistency.
Gemassmer says payments could also easily be lost through the manual process. While manual recording can work fine for small companies, the room for error gets infinitely larger as a company's assets grow.
Many real estate firms in the region also rely heavily on post-dated cheques for rental payments. He says this system can lead to a raft of problems as tenants often forget due dates and there is no industry standard in responding to such problems. ''No one wants these cheques to bounce, it hurts everyone and it's a criminal offence,'' he says. ''Everyone we talk to says there's a lot of inconsistencies in how this works.
''If a tenant's cheque is bounced three times in a row at what point do you call them? Many of the times they're just too busy and they have forgotten [about the payment].''
Gemassmer says automated or electronic payment systems are less prone to errors and are more efficient.
While it usually takes the best part of a month for businesses in this region to close the books at the end of a financial month, the global average is closer to five or six days, Gemassmer says.
''The clients who adopt integrated platforms often find that they reduce or reallocate back office and IT head count anywhere from 10-20 per cent — that's a direct efficiency.''
The Hong Kong-based IT executive says many countries share Dubai's problems with outdated real estate software infrastructure, although the emirate has made progress in the past two years.
''More efficient integrated real estate systems have been slower to be adopted here as opposed to other places,'' says Gemassmer. ''However, we've seen a steady change over the past two years as local firms look to enhance their real estate and asset management services.''
Gemassmer believes as Dubai catches its breath from the breakneck levels of development, these technology issues will be ironed out.
Yardi provides a one-stop shop for the overall life-cycle of real estate, with tools to help developers decide whether to build or invest in property, monitor units and vacancies, maintain buildings and manage payments, says Gemassmer.
The company also offers cloud-based software with different web portals.
''Ten years ago everyone was focused on selling units [and] the quality of units was very much in question,'' says Gemassmer. ''The market now understands that if Dubai wants to be a worldclass city it needs to embrace asset management.''
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Source: Amanda Fisher, Special to Property Weekly