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
Green Building Funding Available for Hotels
A part of the Green Building Funds $30M Grant program is available for Hotels but what will you be required to do to access the funds?
Formal guidelines have not been established but in line with the previous Green Building Fund you will be required to demonstrate greenhouse gas savings. A NABERS Energy assessment is a sure way to demonstrate existing property performance so you can then measure the improvements being targeted through upgrades.
If you are considering upgrading and applying for a Green Building Fund Grant for your Hotel then we can assist you in this process. Napier & Blakeley have been successful in obtaining over $5M in funding for our clients in the previous Green Building Fund rounds.
The Hotel NABERS Energy rating is not applicable for all hotels and you should consider the following when reviewing the requirements to obtain a rating.
