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Common Asset Management Mistakes and How to Avoid Them


Alan Christie • Sep 20, 2024

In the dynamic landscape of UK commercial real estate, effective technical asset management is the cornerstone of success. However, even seasoned professionals can fall victim to common pitfalls that undermine portfolio performance.


At Resero, we've identified five key areas where mistakes frequently occur: Regulatory Compliance, Risk Management, Decarbonisation, Strategy, and Operational Efficiency. Let's explore these areas and discuss how to avoid potential missteps.



1. REGULATORY COMPLIANCE MISTAKES


The UK's regulatory landscape  is constantly evolving, particularly in the wake of Brexit and increasing focus on building safety. Common mistakes include:


  • Overlooking changing regulations: Many asset/building managers fail to stay abreast of new legislation, such as the SFG20 compliance standards, the Building Safety Act 2022,  and risks associated with the trajectory for the Minimum Energy Efficiency Standards (MEES). 

  • Failing to maintain proper documentation: Incomplete or disorganised records can lead to compliance issues and potential fines.


How to avoid: Implement a robust compliance management system, conduct regular audits, and consider appointing a dedicated compliance officer. Stay informed through industry bodies like the British Property Federation and RICS.



2. risk management oversights


In an uncertain economic climate, risk management is more crucial than ever. Typical errors include:


  • Underestimating potential threats: Failing to account for risks such as market volatility, interest rate changes, or unforeseen events like the COVID-19 pandemic.


  • Lack of comprehensive risk assessment: Focusing solely on financial risks while neglecting operational or reputational risks.


How to avoid: Conduct regular, comprehensive risk assessments. Develop scenario planning exercises and implement robust risk management strategies that cover all aspects of your portfolio.



3. DECARBONISATION PITFALLS


With the UK government's commitment to net-zero emissions by 2050, decarbonisation is no longer optional. Common mistakes include:


  • Ignoring sustainability/net zero trends: Failing to recognise the growing importance of Environmental, Social and Governance (ESG) criteria to investors and tenants.


  • Short-term thinking in energy efficiency: Opting for quick fixes rather than long-term sustainable solutions.


How to avoid: Set clear sustainability goals aligned with the UK's net-zero target. Invest in green technologies and conduct regular energy audits. Consider certifications like BREEAM to demonstrate your commitment to sustainability.



4. STRATEGIC MISSTEPS


A well-defined strategy is essential for long-term success. Frequent errors include:


  • Lack of clear long-term vision: Focusing on short-term gains at the expense of long-term value creation.


  • Failure to align technical asset management with business objectives: Operating in silos rather than integrating technical asset management with overall business strategy.


How to avoid: Develop a comprehensive technical asset management strategy that aligns with your organisation's goals. Conduct regular strategy reviews and ensure stakeholder engagement across all levels of your organisation.



5. OPERATIONAL EFFICIENCY BLUNDERS


In the competitive UK market, operational efficiency can make or break your portfolio's performance. Common mistakes include:


  • Neglecting preventative maintenance: Reactive approaches to maintenance often lead to higher costs and disruptions.


  • Resistance to new technologies: Failing to adopt PropTech solutions that could streamline operations and improve tenant experience.


How to avoid: Implement predictive maintenance programmes, embrace innovative PropTech solutions, and focus on continuous process improvement. Consider tools like smart building systems to enhance operational efficiency.


THE INTERCONNECTED NATURE OF TECHNICAL ASSET MANAGEMENT


It's crucial to recognise that these five areas are deeply interconnected. For instance, poor regulatory compliance can increase risks, while inefficient operations can hinder your decarbonisation efforts. A holistic approach to technical asset management is essential for success in the UK's complex property landscape.



TOOLS FOR IMPROVEMENT


To navigate these challenges, asset managers need robust tools for evaluation and optimisation. This is where the Resero Asset Optimisation Scorecard comes in. This free, comprehensive tool assesses your portfolio across all five key areas, providing instant insights and actionable recommendations.


By using the Scorecard, you can:


  • Identify potential compliance gaps


  • Assess your risk management practices


  • Evaluate your progress towards decarbonisation


  • Align your strategy with industry best practices


  • Pinpoint areas for operational improvement


Conclusion


In this sector, avoiding these common technical asset management mistakes is crucial for maintaining a competitive edge. By focusing on the key areas above, you can enhance your portfolio's performance and resilience.


Remember, effective technical asset management is not about perfection, but continuous improvement. By regularly assessing your practices and staying open to new strategies and technologies, you can start navigating the challenges of the UK market with confidence.


Ready to take the first step towards optimising your technical asset management approach? Try the Resero Asset Optimisation Scorecard today. It's free, takes less than 5 minutes, and provides instant, actionable insights. The Scorecard is currently exclusive to subscribers of our newsletter, Unlocked. Sign up to receive instant access.


Don't let common mistakes hold your portfolio back. Contact Resero today to learn more about how we can support your technical asset management journey.


Completed the Scorecard and want to discuss your results?

Book a free call with us today..


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