Due Diligence

Technical Due Diligence and ESG

Capture 2Napier & Blakeley’s expertise in asset and development advisory provides an integrated approach to achieve the best results for sustainable property outcomes.

Our quantity surveyors, building consultants and engineers can plan and price works associated with improving the ESG performance of a building.

Sustainable investments achieve long-term financial growth where risks and opportunities are identified and managed through environmental, social and corporate governance or ESG.

Technical Due Diligence is a perfect tool to facilitate good property transactions, to initiate asset management and   to achieve investment goals.

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Season’s Greetings from Napier & Blakeley

santa-present-beach-reduced2016 was quite an incredible year with significant global change and with it, new opportunities opening up for us here in Australia.

It was also another busy year for Napier & Blakeley, with our independent trusted advisory services again being in great demand from both local and offshore clients investing in Australia and SE Asia.

In 2016, we managed client projects across all states and territories of Australia and also in Singapore, Hong Kong, Indonesia, Sri Lanka, Fiji, The Maldives, Guam and New Zealand.

We would like to say a big thank you to all of our clients and send all of you and your families our Season’s Greetings.  We look forward to working with you again and to a successful and prosperous 2017 for all.

Our offices will close at 5pm on Friday 23rd December and reopen on Monday 9th January.

Should you have any urgent business during that time, please contact our Managing Director, Alastair Walker on 0419 503 289 or at awalker@napierblakeley.com. Continue reading

Technical Due Diligence

Consistency, Clarity and Efficiency

Napier & Blakeley Due Diligence Reports are accepted by institutional grade investors – including REITS, super funds, sovereign funds, family offices, financiers and private equity globally.

We’re the market leader in the provision of Technical Due Diligence, demonstrated by the fact we’re involved in about 75% of all significant commercial property transactions to occur in Australia.

The key here is that a Napier & Blakeley Report is acceptable to all parties to a transaction.

Independence, Value, Risk Management and Upside

A Napier & Blakeley Due Diligence Report provides value to investors and their financiers as we are truly independent from the transaction, management or valuation of an asset.

We focus only on those financial matters, short to long term, material to the investment decision. Risk Management is facilitated by the allocation of probability of events occurring against their possible cost implications. This provides for a risk weighted expenditure forecast. Continue reading

Napier & Blakeley strengthens team

115041 N&B_Trans&Advis icon_Medium_BNAPIER & Blakeley has bolstered its Transaction Advisory team with the appointment of Kate Rickards.

Rickards has been appointed senior consultant within the N&B’s Transaction Advisory team and will be based in the Melbourne office.

Rickards’ previous roles have been at AECOM, Philip Chun and Abigroup.

“We’re absolutely delighted to have Kate on board,” National director Rob Howells said.

“With a background in mechanical services design, regulatory compliance and tendering and estimating, Kate makes for an excellent due diligence consultant in our expanding business.” Howells concluded.

Property Review Australia
14 May 2015

Wayne Swan… “Keep your mitts off the MITs!!”

The doubling of the tax rate applicable to international Managed Investment Trusts (MITs), with no consultation nor warning and – it would appear – based upon miss-guided thinking, not just flies in the face of the plan to make Australia “the hub of finance in Asia”, but the sudden move places Australia on the list of countries with significant Sovereign Risk.

As a result Australia is no longer considered so transparent.

Since the budget, we have seen prudent comments from Property Council of Australia and reports from the likes of Business Council of Australia. These confirm what intuition tells us – that 7.5% of something is better than 15% of nothing. Continue reading

Tax jump jolts investors

Many had raised serious concerns about the transparency of the Australian investment landscape and were considering alternative investment destinations.

A leading Australian property group has strongly criticised federal government tax changes, arguing they have stopped international investors from putting their money into Australian property.

The government in the budget doubled the withholding tax rate for international managed investment trusts (MIT), from 7.5 per cent to 15 per cent. The measure has since been approved in the Senate, with a concession for new energy efficient buildings.

Peter Frith, managing director of property and development adviser, Napier & Blakeley, said the action, with no consultation or warning, was a huge mistake and was apparently based on misguided thinking. Continue reading

Buyers Beware… Investigate or Reach for your Wallet

In the last year Napier & Blakeley have undertaken more than 100 physical due diligence and capital expenditure forecast exercises with a combined value in excess of $10billion.

It’s rare to find nothing that would be considered problematic for an incoming owner, but the last few years there have been a few issues that have become commonplace through either lack of ongoing investment and maintenance or as a result of new market legislation.

The GFC brought substantial financial constraints to the entire economy but for property owners it brought pressures through loan to value ratios (LVR’s), reductions in value and rental income. This created a catch 22 situation where many knew they had to keep maintaining and spending capital to keep their assets compliant, relevant and therefore rentable, but were unable to directly fund or borrow funds to do so.

We recently re-analysed an asset that we had prepared due diligence and capex forecasts for a few years ago, and the list of items that we identified in our initial report were almost completely the same as now. Nothing had been fixed, maintained or repositioned. So, many years down the track the asset has fallen deeper into redundancy and therefore costs more to rectify. Continue reading

New Disability Access Standards – Effective 1 May 2011

The purpose of the Premises Standards (and corresponding changes to the Building Code of Australia and State / Territory Building Law) is: 

  • To ensure that dignified, equitable, cost-effective and reasonably achievable access to buildings, and facilities and services within buildings, is provided for people with disability, and
  • To give certainty to building certifiers, developers and managers that if standards are complied with they cannot be subject to a successful complaint under the DDA in relation to those matters covered by the Premises Standards.

1.  General Application

The Premises Standards will apply to all new buildings and to extensions or additions to existing buildings.

In most circumstances it will also be necessary to provide an accessible path of travel from the principal public entrance to the new or modified part of an existing building.

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R & M Diminished

Is your ‘too good to be true’ property deal rally sustainable?
According to Napier & Blakeley managing director Alastair Walker, lack of capital post GFC has lead to a significant neglect of repair and maintenance (R&M) and Capex spend.  Having worked on property due diligence valued at plus $10B since the GFC, Napier & Blakeley has seen only nominal spend on upkeep compared with previous years.

Reduced Life Expectancy and Premature Capex
Recent technical due diligence and condition assessments have also found that the lack of R&M and Capex budgets for economic life driven plant and equipment overhauls and refurbishments has resulted in increased short and medium term Capex.

To put this in context, without appropriate R&M, major plant items may have an economic expected life of (say) 25 years, however the reduction of removal of maintenance can result in a major shortfall in expected life to around 15 years.

The Reaction
Astute purchasers have become aware of this risk and look for these patterns in their technical due diligence reporting to ensure that appropriate Capex costs are factored into the purchase price to account for a vendor’s R&M expenditure shortfalls. 

Condition assessments, maintenance reviews, energy assessments and risk weighted strategic Capex forecasts have become 2010’s essential tools for good asset and facility management and sustainable property solutions.  Continue reading

Recent Trends in Technical Due Diligence

Is your ‘too good to be true’ deal really sustainable ?

Lack of Capital post GFC has lead to a significant neglect of R&M and Capex spend.

Having worked on property due diligence valued over $10B since the GFC, Napier & Blakeley have seen only nominal spend on upkeep compared with previous years.

Risk of Non-Compliance (i)

During this period the increasing trend has been a notable reduction of Repair and Maintenance (R&M) and Capital Expenditure (Capex)  budgets. Whilst this strategy may have been necessary in some circumstances e.g. postponement of non-essential Capex, we have found too commonly evidence of non-compliance regarding statutory maintenance such as testing, auditing and reporting of essential safety measures and fire safety systems.

Reduced Life Expectancy and Premature Capex 

Recent technical due diligence and condition assessments have also found that the lack of R&M and Capex budgets for economic life driven plant and equipment overhauls and refurbishments has resulted in increased short and medium term Capex.

Continue reading