REAL ESTATE PROPERTY MANAGEMENT MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Real Estate Property Management Market Size and Trends

The global real estate property management market is estimated to be valued at USD 22.56 Billion in 2024 and is expected to reach USD 37.78 Billion by 2031, exhibiting a compound annual growth rate (CAGR) of 7.6% from 2024 to 2031.

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Rapid urbanization and growth of the hospitality industry are fueling the need for professional property management services across the world. There has been a notable shift towards outsourcing property management functions to expert firms in order to benefit from their specialized expertise and experience in maintaining commercial and residential buildings efficiently.

Market Driver - Growing demand for professional property management services

With the rising global population and urbanization trend, the demand for residential and commercial properties has increased significantly over the years. However, maintaining and managing multiple rental properties has become a challenging task for individual landlords and property investors. The responsibilities of finding good tenants, collecting rents on time, handling maintenance issues, and dealing with vacancies and ensuring compliance with local regulations have increased manifold. This has fuelled the demand for professional property management services globally.

Professional property management firms help landlords and property owners to focus on their core business while handling all property management activities efficiently. They conduct extensive marketing and advertising of rental properties to find quality tenants. Their experienced property managers interact with tenants regularly, address any issues promptly and ensures smooth staying experience. This helps in retaining tenants for longer duration and maintaining high occupancy rates. The property management companies also efficiently handle collection of rent, payment of bills as well as maintenance works. They are trained to identify urgent repairs and facility upgrades needed to maintain building safety and aesthetics. This significantly reduces vacancies and enhances property valuation over the long run. Some full-service property managers also provide annual accounting, preparation of reports, and help with tax filing which offers convenience to investors.

With their large portfolio of properties, professional firms are able to negotiate better rates for repair works, utilities, and other services. This allows individual landlords and small property owners to benefit from economies of scale. The property managers are also experts in complying with the latest local tenancy laws and regulations. This saves owners from penalties or litigations due to the lack of legal knowledge. During recent pandemic, many property owners relied on these companies to navigate quick policy changes and offer rental reliefs to tenants facing hardship. Overall, growing complexities have raised the bar of expectations from renters and regulators alike, increasing reliance on experts to efficiently manage real estate portfolios.

For instance, in June 2023, MRI Software LLC, a global leader in real estate software solutions, launched MRI Engage Work, a commercial tenant portal aimed at delivering a cohesive and seamless experience through various technological solutions. This innovative platform boasts an intuitive and user-friendly interface that simplifies interactions between property teams and tenants. With MRI Engage Work, tenants can easily access billing details, make payments, and submit service requests online, all through a single login, thereby enhancing overall tenant engagement and satisfaction.

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Increasing number of real estate investors

A flourishing real estate market has witnessed rise of many individual and institutional investors globally in recent years. Easy availability of home loans at low interest rates, emergence of REITs as an alternative investment avenue as well opportunities through crowd funding platforms have drawn more capital into the sector. Investors are exploring real estate as a profitable asset class to generate long term returns through capital appreciation as well as stable rental incomes.

Many first time property buyers are gradually turning into accidental landlords after shifting to bigger homes. They then realize rental incomes can help repay their existing home loans and also earn higher returns than traditional savings. This has motivated several small time investors to directly manage one or few rental properties. However, issues around tenant management, maintenance responsibilities and regulatory compliances have left many struggling. As their portfolio grows beyond personal bandwidth, outsourcing management to experts is becoming a necessity.

Larger institutional investors like pension funds, insurance companies, and sovereign wealth funds are also allocating billions into commercial real estate like offices, malls and warehouses. For them, core focus remains on asset allocation rather than direct oversight of properties. Thus, these institutional landlords invariably prefer appointing specialized property managers who can handle entire lifecycle of their assets professionally right from finding tenants to exit.

With rising global liquidity and improving connectivity, many foreign investors are now exploring investment opportunities across borders. However, lack of local market knowledge increases operational challenges for overseas owners. Engaging an internationally experienced property manager provides them comfort of managing assets away from home. Overall, for all categories of investors, professional management allows maximum utilization of capital by freeing it from operational hassles. This driver is thus increasing reliance on real estate property management firms globally.