Where location fails, try property management

The premise of the well-worn phrase "location, location, location" in real estate suggests that all other factors pale into insignificance when it comes to the value and desirability of a property. Important, yes, but is it everything?

I would argue that for major commercial buildings in this time of advanced technology, increased focus on green credentials, and tougher local and international competition, this simply isn't the case.

If you also consider the effects that a tough macro economic environment has on asset revenues, then strategies to unlock hidden potential or drive operational cost efficiencies become a primary concern for investors and landlords to allow them to achieve profitable returns on their portfolios.

A solid theory, but is it relevant here in Hong Kong where we like to think that the only way is up and we seem to take almost perverse pride in featuring at the top of the various studies as the world's most expensive city for real estate?

We all saw the escalating prices of commercial property at the start of the year where everything from office space to industrial units and even parking spaces were up for grabs by speculators hungry to make quick gains on a market that was red hot. Operational cost efficiencies were the last thing on these investors' minds as many assets didn't even reach exchange before they were sold on again.

These sales catch the headlines, but like any other international city, this isn't a true reflection of the cycle of real estate.