Outsourcing Management By Real Estate Investors In The Netherlands

In the Netherlands outsourcing management of real estate by institutional investors is not something obvious. Since real estate investment became in use by institutional investors about 1960, investors started their own real estate management departments. Only property management, that is concerned with daily administrative, technical and commercial management as well as maintenance activities, was outsourced to external parties. Meanwhile, these so called real estate management organizations got more professionalized caused by increased experience and changed (real estate) market circumstances. For example, this professionalization finds expression in merging local parties into (inter)national operating real estate management organizations, benchmarking of management performances and standardization of contracts. Nevertheless, the relationship between investor and manager is under pressure. Profit margins are small and real estate investors are still inc lined to think that the services delivered by real estate managers are below standards. The aim of this paper is to investigate whether there are chances for real estate management organizations to reinforce their market position. To answer this question a survey was done among three different types of real estate investors: institutional investors, limited partnerships and private investors. In the survey current outsourcing strategies, future strategies, motives and the opinion about real estate managersí services were questioned. In the conclusions a comparison will be made between outsourcing strategies of different real estate investors. Chances for the real estate management sector are formulated. At the end, the paper reflects on the sector as a whole in relation with other sectors and other countries.