Business Transformation in the Property Management Industry

Introduction

The Property Management Industry is currently undergoing a period of significant transformation. A confluence of factors, including changing demographics, technological advancements, and the deepening interdependence of the global economy, are introducing new uncertainties into the market. While the foundation of stable rental demand remains intact, the sustainability of traditional business models is being severely questioned, necessitating fundamental changes. This article aims to evaluate the current state and challenges of the property management market based on objective data analysis and to propose key strategies for future sustainable growth.

Specifically, we analyzed the current state of the industry from multiple perspectives, including both macroeconomic indicators and micro-market trends. While evaluating positive factors such as the penetration of PropTech and the increasing interest of overseas investors, we also address cost pressures in the order-receiving environment, increased operating costs due to the weak yen and inflationary pressures in the supply environment, and the impact of strengthening stock businesses by house builders and developers on the property management industry.

In this environment, property management companies are required to not only improve productivity through fundamental reviews of their organizations and operations, but also to re-evaluate the value they provide through sophisticated customer strategies and business transformation. This paper presents key strategies that property management companies should take to achieve sustainable value creation in the future.

Takaumi Tamura
Partner
Deloitte Tohmatsu Consulting LLC

Ayumu Shimizu
Director
Deloitte Tohmatsu Consulting LLC

Table of Contents

Chapter I　Trends and Outlook of the Property Management Industry

1. Macro Trends in the Property Management Industry
2. Micro Trends in the Property Management Industry
3. Business Transformation in the Property Management Industry

Chapter II　Four Key Strategies for Property Management Companies

1. Shift from Operations to Solution-Oriented Services
   1-1. Advanced Leasing Strategies Utilizing Digital Technology
   1-2. Enhancing Customer LTV for Tenants and Owners Through Customer Apps
   1-3. Addressing Real Estate ESG and Unlocking on Its Secondary Value
2. Restructuring Operations through Digital Technology
   2-1. Core System Renewal for DX Realization
   2-2. Transition to Functional Organizations
   2-3. Realizing Advanced Customer Service Through Generative AI
3. Advancing Performance Management
4. Expanding the Scope of Property Management