What is property asset management?

There are many definitions but at Ashurst Real Estate, we consider property asset management to mean the maximisation of value at a property over time whilst maintaining risk at an acceptable level.

Property asset management can take many forms, whether to advise on the long-term sustainability of a property, refurbishment within the same use class to enhance capital or rental values or taking a strategic view of the management with a view to increasing its capital or rental value over time.

Ashurst Real Estate’s property asset management experience broadly falls within three distinct services which we define as preserving capital, repositioning of an asset, and strategic asset management.

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Preserving capital

With this particular line of property asset management, Ashurst Real Estate worked with the client’s tax advisors to help identify a suitable alternative property asset where capital could be redeployed to maximum tax advantage following the sale of another property.

We identified suitable opportunities where our client could rollover capital gains tax into a qualifying asset. Although this did not dissolve the capital gains tax liability, the client was able to reinvest the total proceeds of sale from the previous asset by deferring the liability to a future date.

Repositioning of an asset

When one discuss is the repositioning of an asset in property asset management terms, we are really focusing on either the redevelopment or change of use of a property asset to more valuable use.

Repositioning of a property asset normally takes place due to obsolescence of a building or a particular use or where the existing use is not performing to expected performance indicators.

Strategic asset management

Strategic asset management generally means taking a holistic overview of a property asset by preparing a medium to long term business plan for maintaining and enhancing income over the ownership life cycle of the asset.

Examples of strategic asset management could be dividing a single large unit into 2 smaller, more valuable units, renegotiating leases for a more valuable outcome.

Typical strategic asset management normally involves taking back property from a tenant at the end of a lease term, redeveloping or refurbishing and returning to the market at a higher rent.