As commercial demand stalls, agencies turn to technology for help
28 February 2014
Vacancy rates for CBD offices around Australia are climbing, and commercial agencies are now having to work smarter to clear stock.
According to Property Council estimates, 12 key Australian centres had vacancy rates in January in excess of 10%, ranging from 10.5% in North Sydney to 16.7% in the Gold Coast (AFR 9 February 2014). The problem is not confined to offices. Industrial agents are also facing a growing vacancy challenge and this is poised to increase in locations in South Australia and Victoria, where automotive industry restructuring is afoot.
Commercial agencies are adopting new sales and marketing processes to rise to these challenges and a critical factor lies in the use of technology to ensure the business runs at peak efficiency. In a market where stock moves quickly and values are rising, listing management technology, such as the ability to promote stock on multiple portals, plays an important role. But when demand is sluggish, the emphasis needs to change to consider other factors.
A key issue is an agent’s ability to provide transparency throughout the long selling cycle. In a falling or static market, owners may have unrealistic price expectations or lose patience as days on market increase. Similarly, potential tenants may have unrealistic rent expectations and seek to use growing vacancy rates to their advantage. Communication of accurate market and activity information becomes an essential ingredient to maintain owner and tenant relationships.
Technology can come to the assistance of an agency by providing transparency to both owners and tenants. For owners, the agent should be able to generate evidence with reports detailing historic sales or leasing transactions to prove that the market is clearing similar properties at rates beneath those expected by the owner. Similarly, an ability to quickly generate the depth of enquiry activity on a property will help to motivate a potential tenant to proceed with an offer or alleviate an impatient owner’s concerns that a transaction can be achieved and that the agent is working diligently to clear the stock.
Simple listing management systems are often unable to cover the depth of information required to tackle these tasks. Technology to handle the complete life cycle of a real estate transaction from opportunity through listing to deal tracking and settlement is required. According to prominent Brisbane agent Ken Madsen of Madsen Property, “Keeping a record of deals is vital to convince owners of realistic prices as is the ability to capture all information in one spot.”
Savvy agencies are also using their own websites to collect intelligence that will assist in a difficult market. For example, using advanced integration technology from Adept’s Surga Central, agency websites automatically record the details of all searches performed as well as the specific listings viewed. This information is then made available to management in the form of reports and dashboards. Armed with this data, an agent can understand exactly how many times a particular listing has been viewed on the website and when those views occurred. This information can then be revealed, as required, to advance a leasing or sale transaction or to convince an owner that similar properties are receiving more enquiries because their expectations are more realistic.
Armed with iPad tablets connected to a cloud database, field-based agents are now able to respond immediately to enquiries and to share information with owners and potential tenants and purchasers. This might be an interactive stacking plan showing lease occupancy of a building or a chart of the enquiries received over the last month. Alternatively, an agent might upload an expression of interest brochure to the cloud database and store it against a property. From there it can be emailed from the agent’s iPad and an enquiry recorded in the CRM against the contact to whom it is sent.
In a sluggish real estate market, the ability to deliver relevant information quickly and to do so in a consistently superior manner will help protect an agency’s brand and build customer loyalty at the expense of competitors.