The rationalisation of Gensec Properties into asset management and property management, with a 'for sale' tag on property management, has prompted speculation on whether SA is set for a wave of institutional property outsourcing. Observers believe that institutions like Liberty Property Group, Old Mutual Properties, Investec Property Group and RMB Properties could follow Gensec's lead.

McLean says: 'We would never consider outsourcing our property management services.'

He says the group is in business to maximise the value of assets under its management.

'We could not achieve this to our satisfaction if we hired someone else to manage our property,' says McLean.

Independent property management companies are also in business to make money, and this 'may clash with our own mission to maximise value', he says.

'Go around and see which tenants are happier those in buildings managed by third parties and those managed by their owners.

'I believe tenants can be best kept happy by owner-managers, not thirdparty property managers.'

JHI property management director Andrew Teixeira believes the wave of outsourcing will catch up with the institutions because the future of business is in specialisation.

Teixeira says financial institutions like Liberty Life are not in the business of managing property, 'whereas we are'.

He says this specialisation gives his company a competitive advantage over in-house service providers.

He feels pressure is mounting for companies to focus on their core business, and this might extend to institutions that maintain in-house property management services.

Investec Property Group MD Sam Leon says his group is unlikely to follow Gensec's lead, focusing instead on areas where it has direct interest or fiduciary responsibility.

Business Day