National Strata Management Benchmarking Project 2006 – Key Findings

Like the environment, the business climate for strata managers is changing - and with change comes a number of challenges and opportunities for strata businesses.

To ensure their business thrives, not just survives, in these changing conditions, strata managers must keep abreast of the changes and proactively develop new strategies to secure the future of their businesses.

Some important key issues were raised in this year's survey findings. All businesses surveyed had an intention to acquire another business or portfolio, but fewer businesses have an intention to sell. Of those with sale intentions, the majority intend to only sell part of their equity.

The rate of growth in income per lot continues to struggle to keep up with inflation, whilst expenses continue to grow due to increasing wage premiums which are being exacerbated by staff shortages. Despite the inability to grow fee income, survey participants did not consider the amount of the body corporate management fees to be a significant concern to lot owners.

Larger businesses are using leverage (employed strata managers per principal) to achieve high profitability per principal. As a percentage of income, non-salary overheads decreased with size, whilst salary expense margins increased with size.

All groups anticipate increasing their personnel over the next three years. However, 71% of businesses consider there is a lack of suitably qualified staff in the industry, with more than half of the businesses considering it difficult to source and employ new staff.

Most businesses consider succession planning important, however, less than half of all businesses have a succession plan. The most common primary business objective of small and medium businesses is to accumulate wealth and maintain growth. For large businesses it is to increase the value of the business.

Major factors attributed to growth are purchasing new portfolios, new development stock, word of mouth referral and productivity improvements. The focus for achieving growth in the next 12 months for many businesses is protecting and developing key referrer relationships, staff stability, staff training and improving administration.

For more comprehensive information on the findings of the Benchmarking study, including numerous income, expense and profitability performance indicators, please contact one of our regional strata management specialists: