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How are management companies coping with the current crisis?

Maria Onuchina, Managing Director of PM Becar Asset Management, talks about the management company's anti-crisis measures for different segments of commercial real estate.

Crisis is a test of companies, businesses and current teams’ strength. All market players are in one boat because of the pandemic, and in a situation of uncertainty, it is important for companies to be open to each other, to share experiences and to assist in any way possible. Having experienced more than one crisis in 28 years of existence, Maria Onuchina, Vice President of Development at Becar Asset Management, tells how the company manages to meet the new challenge.

Becar has never used loan capital, so we had no time to prepare – we have to act decisively in early March not waiting for government official orders.

Our real estate portfolio has always been diverse - from traditional BCs and shopping malls to apart-hotels and covorkings. First of all, we had to analyze our client group, or rather the factors on which they depend (visitors, residents, aviation, tourism, etc.). Then we started to think what we can do with our products so that they remain in demand in these groups.

The hotel segment, as we know, was the first that suffer from the coronovirus control measures. Without waiting for the decline, it was decided to transfer our hotel Vertical from short-term to long-term contracts. Instead of renting an apartment, customers were offered to stay in our hotel with free access to all infrastructure. As at mid-April, the occupancy rate at Vertical was 37%. This figure was reached by those who rented rooms for self-isolation purposes for medium and long term.

Since this April, the hourly rental of offices has been available at all GrowUp sites. The service became popular among people who have to work from home, but for a number of reasons cannot work effectively there. Besides, due to the ban on all public events, GrowUp Barricade covorking began to provide the service of renting meeting rooms for webinars with all necessary equipment.

Today real estate owners need qualified assistance from management companies more than ever. Understanding the importance of maintaining partnerships during the crisis, we developed a service to optimize the cost of maintaining buildings through the competent conservation of objects during the quarantine. We switched to remote service with periodic visits of technical staff for a number of buildings. The mobile application "Kaidzen in FM", which was developed several years ago, allows us to keep in touch with the client 24/7, and also generally makes the entire management process fast, safe and transparent.

Crisis is an optimization time. We do not hide the fact that from the first days of quarantine, we started to rigidly segment employees. As cynical as it may sound, this is a forced measure when it comes to the business survival. So, during the analysis the company's management identified 20% of key employees and 60% of employees who provide processes. All the others, alas, were fired.

At the same time, we did not revise our main principle on which we have been building partner relations in recent years – win-teams, win-investor, win-clients. This approach plays into our hands during the crisis.

For example, part of our client group ran out of money. If we understand that in a particular situation we can help, we do so. Some, on the contrary, have more requests for certain services. Yes, you can twist your hands, appeal with contracts, but very quickly we will find ourselves in a different position. In 2008, we all quickly realized that you can't build a contract with a tenant on the right of the owner's strength. It works efficiently, but not for long. During that crisis, the pendulum swayed very quickly towards the tenant. It does not mean that today everyone needs to give discounts, but it is important to sit down at the negotiating table and openly discuss what are the tasks and requests of the Owners - MC - Tenants, their Consumers. If we survive, then we do it together. If we do not reach a compromise, then it will be bad for all the links in this chain. Companies that do not develop their digital directions simply have no chance to cope with this crisis. When we get out of self-isolation, we'll end up in a world where everything is automated. It's great that in this area we've managed to make ourselves a straw. Firmly believing in the future of innovation, the last few years we have invested in creating our own IT solutions. To date, Becar has developed 10 software products. Their functionality ranges from placing a job order to controlling the movement of personnel on site. All of these solutions are the Becar FM cloud platform - a comprehensive product that enables to manage the commercial property. Each customer will be able to choose the software for his own tasks. They help to automate management processes, control the quality of work performed and the work of personnel, to save customers' money. We see the opportunity to quickly and multiply expand our audience due to digital technologies, so no project has been closed in a month and a half.

Many of our partners believe that after the quarantine is lifted, the situation will return to normal. We do not believe that. The changes that are now taking place in the world will stay with us forever. We need to reconsider the risks and make plans for the future based on the current situation. It is our responsibility - as business, as people.

What I would like to note here is that modern managers need to learn to instill confidence, inspire their employees, do it through the screens of monitors. People who continue to work at sites do not see their supervisors. All their interaction is done on Skype. And this is a different way of communication.

On the other hand, in the new reality, the manager must make very tough and directive decisions every second. There is no more time left for bureaucracy. Unfortunately, all the rules and procedures were made in another reality, so they will not be able to protect us from new risks. And at this moment, the leader must take responsibility, experiment, make mistakes in order to win in the future. At the same time, it is important to let his teams work on the principle of startups - with burning eyes, with faith in the idea.

Salaries and numbers of staff are reviewed by managers first of all during the crisis. But at the same time, they forget about the motivation of their employees. Today it is important to sharpen everyone for efficiency, as well as to learn to assess it in a different way. If we used to look at whether a person is present in the office or not, now we can only judge by the result of work.

For employees, the current crisis is certainly a challenge. Working from home is a challenge. Remote meetings with clients are a challenge.

At the beginning of self-isolation, many managers began to notice a surge of efficiency of employees, because people have stopped wasting time on the road, gathering, movement. On the other hand, every day it becomes harder for them to negotiate in the zoom, to divide hours into working and non-working. At such moments, one should not leave employees alone with their problems. One of the ways to solve them may be the organization and conduction a series of webinars for employees in order to increase their personal motivation, efficiency, etc..

This is what we did at Becar. And how do you cope with it?