Developing specialist services in a housing management company

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1 REIM Real Estate Investment and Management Oy Ltd # 42 Spring 2015 Hämeenlinna Imatra Joensuu Kouvola Lahti Lappeenranta Mikkeli Oulu Porvoo Tampere first name.last name@reimgroup.com Mailing address: PL Lappeenranta Suomi Finland Visiting address: Väinö Valveen katu Lappeenranta Developing specialist services in a housing management company REIM had a master s thesis done in Lappeenranta University of Technology Phone Who is Henna Har kainen and where is she from? I am a 27-years-old Helsinki-based graduate engineer in the field of industrial engineering and management. I graduated last autumn from Lappeenranta University of Technology where my major was Supply Chain Leadership. My specialty is in the field of service processes. What kind of an experience was it doing the master s thesis Developing specialist services in a housing management company for REIM Group? The thesis took me into a totally new field which inspired me to learn new things every day, but at the same me challenged me to look at the field of business as an outsider. Maybe that is why I was able to separate the services into different en es by using my knowhow in service development. The biggest challenge of the research was separating what is told about housing management services and the actual services. However, in the master s thesis we were able to find the most significant solutions that REIM can now use to create clear, more customer-oriented service en es that anticipate any strains on the services. With the help of these en es it will be easier to tell the clients what housing management service en es entail. How do you see the housing management business a er doing the master s thesis? Author of the master s thesis Henna Har kainen from LUT, Faculty of Industrial Engineering and Management. Before my master s thesis my experience with the housing management business was only through personal use of housing management services. The fact is that I didn t necessarily even know what my housing manager actually offered me. My master s thesis broadened my understanding of the diversity of housing management services, as well as of the contents and the possibili es of the service en es offered. What makes housing management interes ng is that the service pale e is so wide that there are endless possibili es for varying the services into different service entities. However, the most important thing is that housing management services need to be described to the client in a way that can be easily understood. This way the client s expecta ons are closer to the truth and the housing management company has a chance to act more effec- vely and to react be er to any challenges in the future. Supervisors of the master s thesis What was it like to supervise Henna Hartikainen s master s thesis for REIM Group? It is always interesting to get to know a new field of business, especially when it is already somewhat familiar through customership. Housing management is specialized professional work that has its own characteris cs. It has been especially interesting to combine the general points of view of services, service processes and service business with the characteris cs of housing management. In your opinion, could the development of housing management, which is important also on a na onal level, Petri Niemi, Professor, LUT be used even more in university studies? If so, how? Developing services, service processes and service businesses is very important for Finnish economy. As a part of the service sector housing management businesses create an important field of research for us. We think that the knowhow in universi- es should be u lized in bringing an outsider s point of view in the business. What kind of a university is LUT today? LUT is compact, agile and concentrated. This means that our size is idealis c for making swi changes while being efficient, and our ac vi- Janne Huiskanen, Professor, LUT Professional services by REIM Group since 1974 House Management Real Estate Brokerage Accoun ng office services

2 Väinö Valveen katu 2, Lappeenranta, Finland Phone es are focused on a few core issues. We are looking for solutions in four global ques ons, which are the focus of LUT s strategy for These ques ons are: Are we going to burn up everything? Is humanity condemned to suffer from the water it has polluted? Will waste be the grave of our future? Will we let Europe degenerate to the world s back yard? The answer in short: No, we are difference-makers and we are commi ed to an alterna ve path. The university s solu on-based research platforms offer solutions especially to these global ques ons. In addition to this LUT utilizes its knowhow in informa on mining and analyzing, in Russian economy, and in suppor ng growth and interna onaliza on of SME s in its new strategy. Our international science community consists of 6500 students and professionals. We are one of the world s 300 best universities (THE World University Rankings ). In REIM Group AIT Marko Hellevaara and AIT Saija Toivonen were the supervisors of this master s thesis. Vice Chairman of the Concern Board of REIM Group Antero Jun la: Concern Board creates, accepts and maintains the concern s strategy REIM Group had a master s thesis done in a University (LUT) with the theme Developing specialist services in a housing management company. Why did the Concern Board think of this as an important issue and how can this research be u lized? The master s thesis showed new points of view on real estate management, and its customer service, even though no new thoughts arose in the end. The work started some welcomed conversations amongst the key persons, hopefully also amongst our whole group. I hope that this master s thesis will add to the interest of service packages and their development, which we should vigorously con nue doing. Due to this master s thesis we also got to know the two professors who supervised this work and who could possibly help us also in the future. Right now it is important to u lize this master s thesis and not let it sit on a shelf. What are the most important tasks of the Concern Board generally, as well as in REIM Group specifically? The Concern Board needs to examine all the issues widely for the whole concern. Visions of the future developments in the field and in the environment are important in this case. The Concern Board creates, accepts and maintains the strategy of the concern. It also follows and supervises the ac vi es of its companies, as well as creates an atmosphere where the best prac ces can be shared. In addi on to these a concern board also supervises its companies profi tability, produc vity and product development. It also endorses the guidelines in human resources. In REIM Group the Concern Board makes sure that the Opera ve Board doesn t forget to consider the future when making decisions. What is the most important in opera- ve leading? Execu ng the strategy and implementing the set goals. Reacting swi ly on any devia ons in economy, marketing and clients, regardless whether the devia on is nega ve or posi ve. Making sure that informa- on moves fast between companies regarding the best practices, new ideas and surprising issues. What do you consider to be the secret of REIM Group s success? We have learned to always pull together. The Chairman of the Concern Board has adopted a determined and construc ve role. Once bi en, twice shy. We have go en through all kinds of problems towards success. In addi on to this, our personnel s educa on and training means a lot, as well as concentra ng on the most important issues. Our li le organiza- on simply works. What other factors do you think are important in the future? In the future IT management will be the most important so taking care of that is the key. The quality and produc vity of our customer service depends on this. Involving ICT opera- ons in any development ac vi es is required in order to develop our working. Improving our profitability and produc vity depends largely on new ways of working, new products and so ware used on them. Antero Jun la, DI, has been a member of REIM Group s Concern Board since He is now the Vice Chairman of the Board. He has previously been CEO of Etelä-Saimaa Sanomaleh Oy for eleven years. Before that he has been Execu ve Vice President in Savon Sanomat Oy and Pohjois- Karjalan Kirjapaino Oy, in the la er he was also CEO. Before this he was Plant Manager at Yhtyneet Paperitehtaat. He has had official posts in chambers of commerce and entrepreneur organizations, in Finnmedia (The Federation of the Finnish Media Industry) and in Etelä-Karjalan Osuuspankki in the supervisory board. 10 th REIM Group St. Petersburg Badminton & Real Estate Seminar Invita onal 2015 will be in St. Petersburg on 20 th to 22 nd May 2015

3 Mailing address: PL 34, Lappeenranta Visiting address: Väinö Valveen katu 2, Lappeenranta Vision of Housing Management 2020 Timo Multanen, Chairman of the Concern Board of REIM Group, MBA AIT, The Finnish Real Estate Management Federation has created a document called Vision of Real Estate Management According to this document the field of real estate management needs to continue developing in order to correspond with the future challenges and to u lize the great possibilities this changing world is offering. Vision of Real Estate Management 2020 is an extensive research and development project which aims to describe the possibili es, development paths, changes, customer needs and markets in the future 2020s in the field of real estate management. The project gathers all the visions from the points of view of the field s specialists, cooperating partners and the surrounding community. The document predicts that real estate management businesses will create internal divisions of labor which allows tasks in customer service, real estate technology and financial management to be divided amongst specialized professionals. For clients this means ge ng be er service and for the professionals in this fi eld it means being able to specialize in even more interes ng working fields. In addi on to this, real estate management businesses grow bigger and more specialized. The meaning of IT and public rela ons investments, educa on and quality systems will grow in businesses of all size. The importance of comfort in living condi ons will grow thus adding to the amounts of repara on construc on. At the same me coopera on partners will grow more important. The challenges in the field get bigger since real estate technology is ge ng more complicated and the tools for communica- on and repor ng are ge ng more versatile. The purchasing power and willingness varies a lot according to the region. Also the different periods in life cycles of real estate require different services. Urbaniza on and the ageing of the popula on affect the type of services required by the inhabitants. For the operators in the field of real estate management this is a possibility to produce allnew services straight to the customers. The differences in real estate are growing, while the building base is getting older and differences in value between neighborhoods keep growing. In the future it is important that the decision-making in a housing co-opera ve is done based on the needs of the inhabitants. The users and the owners of the real estate can concentrate on their own strengths and outsource the real estate management. This change is no ceable especially in municipali es, congrega ons and in public organiza ons. Real estate manager becomes a professional and work will be done more and more in teams that consist of experts in different func- ons. New informa on systems significantly strengthen the processes of customer service. The value of customer service grows. We in REIM Group take the challenges of the future seriously and we want to con nue being in the lead of the development of the field of real estate management. Tradi onal Interna onal Women s Day celebra on in REIM Group Interna onal Women s Day is celebrated annually on March 8 th. This year the day was celebrated on March 6 th at REIM Group s offices. Frank Wendelin from REIM Porvoo is opening the bo le of bubbly champagne at Porvoo office. In Lappeenranta cake was served with the champagne. Men took care of the service. Wai ng for the roses, hugs, champagne and coffee with cake.

4 Väinö Valveen katu 2, Lappeenranta, Finland Phone Jari s Corner The last few years haven t been too good in the field of brokerage. Below are some thoughts from KVLK (The Central Federa on of Finnish Real Estate Agencies), KTI (High Quality Property Informa- on) and from Jari himself about the past and the future. The total amount of real estate sales dropped by 7 percent and the value dropped to 16.5 billion Euros The total value of Finnish real estate sales almost reached 16.5 billion Euros in However, this is slightly over a billion less than in 2013 and 3.5 billion less than in The total amount of old and new apartment sales dropped by 7 percent from The sales of old condominiums and old detached houses have also dropped by approximately the same amount. The change hasn t been so big in the sales of new condominiums. Out of new construc- ons only new detached houses did worse in sales in 2014, whereas new condominiums in apartment buildings and row houses grew by 5 percent in These sta s cs include sales both with and without brokers. By counting the sales this way we can conclude that in 2014 there were altogether sales of old condominiums, whereas last year the total amount was and in 2012 it was In March 2014 the average me an old condominium in an apartment building was for sale was ten weeks. In 2000s in average old condominiums are sold annually. In 2014 this means that approximately sales were not made to reach the average level of the decade. Apartment deals have a big indirect influence on the rest of the community. There are many home-related businesses that suffer from problems in the apartment markets because there is no work to do renova on services, home decora ng companies, design companies and home inspectors among others. describes CEO of KVKL Jukka Malila. KTI states the following good news in its annual overview in December 2014: New investors from abroad are joining the Finnish real estate markets. The signifi cant growth of investors from abroad has been visible this year. KTI made a list of six new investors from abroad who have purchased their first properties in Finland in These investors are Balder, Scandinavian and Baltic Property Group, Partners Group, ARC Global, HIG Capital and AFIAA. For comparison there were only four new property investors in Finland in the previous three years in YEAR 2015, what does the beginning of this year look like from the point of view of REIM Brokerage? From the brokerage business point of view the beginning of this year con- nues to be a li le s ff like in There has been a moderate amount of investors who prefer smaller apartments as investments rather than large family apartments. The market also differs according to the region, as well as the condi on of the apartment: apartments that are in bad condi on don t sell that well. In addi on to this the asking prices of apartments are s ll rather high, and in smaller apartments the asking prices have go en even higher than before. The interests are low but buying an apartment s ll requires a lot of considera on. Since 2005 the best years for apartment sales have been 2007, 2010, 2011 and There is a very versa le supply of different business real estate, but the weak demand does not meet the supply. Of course there is always something going on and usually the most affordable proper es go first, whether it is for sale or for rent. Jari Vahviala from REIM Brokerage states that now a real estate broker needs to work even more than usually, because at be er mes real estate seems to sell itself. Now all brokers need to get up from their chairs and go looking for clients. This year we will most probably see decrease in the amount of brokers and brokerage businesses in the area there is simply not enough demand for everyone. Jari Vahviala is saying that he talked with a re ring broker just last week who stated well that You should not give up. This is a lesson for all of us in the business this is not the first, and not the last depression in economy. Jari Vahviala LKV, MBA jari.vahviala@reimgroup.com The Strongest in Finland Asiakastieto gives The Strongest in Finland cer ficate only to a company that has had either credit ra ng AAA or AA+ (the two highest ra ngs) for at least three consecu ve years. The long-term Pla num ra ng level is given to less than 2% of all Finnish businesses. This ra ng level means that the company is solvent and it has excellent economic sta s- cs. With this criteria a company is allowed to use the special cer fi cate The Strongest in Finland Pla num, states Financial Manager of REIM Group Jani Takala. Financial Manager of REIM Group Jani Takala BROKERAGE FINANCE

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