If you’re not properly insured … then it will be a real disaster
Damage to property and buildings by fire and other disasters, natural or otherwise, costs Australians hundreds of millions of dollars every year. In the last year this has been even more defined by the recent floods in Queensland and Victoria.
Notwithstanding the substantial number of properties that suffered as a result of the recent floods, the most common building disaster in Australia is fire, so it is important to be prepared. Luckily we have only had one earthquake in recent history and although the chances of these occurrences are low, the devastation they can do has been clearly seen in Christchurch. 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.
Queensland Emergency Operations Centre
Napier & Blakeley are just completing their role as Quantity Surveyors on the new QEOC building at Kedron Park in Brisbane.
This world-class communications centre, the largest emergency operations centre in the southern hemisphere, enables best practice strategic response and planning for daily emergencies and incidents and coordinated disaster management for the Queensland Government.
The building was centre of attention in the recent South East Queensland floods and Cyclone Yasi as it became the broadcast facility for regular bulletins by State Premier Anna Bligh and Prime Minister Julia Gillard. Continue reading
Property Depreciation and Natural Disasters
Over the last 6 months, with the unfortunate spate of different Natural Disasters occurring Napier & Blakeley have been requested from numerous clients what effect does it have on their existing and future capital allowances for their investment properties.
The question arises where funds from a third party such as an insurer pays for capital works.
No Insurance
Where there is no insurance claim, then all demolished capital items may be written off from the date of demolition. All newly installed and refurbished costs may be claimed once works have been completed.
Tip – ensure you keep all records of expenditure including all associated on costs such as skip hire, professional fees and the like.
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
Greening the Inner Buildings
An ambitious North Sydney project intends to set a “follow me” example for the industry and demonstrate the possibilities for greening existing buildings. Chris Larsen reports in the Property Australia Magazine Dec 2010/Jan 2011.
When the 76 Berry Street project is complete, it may not look different from the outside – but underneath will hum a world-class sustainable building. 76 Berry Street, North Sydney is the flagship project of the re-lifing program for the Local Government Superannuation Scheme’s (LGS) property portfolio.
The program encompasses six office buildings, plus retail and industrial properties, but 76 Berry Street is the most ambitious. “The opportunity is to take this asset to the next level and make it iconic as far as existing buildings are concerned,” says LGS property portfolio manager, Brian Churchill. LGS had previously repositioned the 1980s vintage 76 Berry Street from what it dubs “B” grade to an “A” grade asset in 2005. However, that refurbishment had not included a major upgrade to the building’s plant, because it was not at the end of its lifecycle. The earlier upgrade had repositioned the building and it received higher rent because of it.
Tax Breaks for Green Buildings
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Using depreciation as a way to encourage the greening of the build environment has been a hot topic for a number of years. During the recent federal election the Labor party announced policies that included the delivery of such incentives.
Last week via their web site Labor provided a little more flesh to their approach in this area.
CBD Legislation Update – Exclusion for Mixed Use Buildings
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Today the Australian government announced that mixed use buildings will be excluded from the CBD legislation for a period of twelve months and major new refurbishments will have a two year exclusion from date of refurbishment.
Following industry consultation the Australian Government Department of Energy Efficiency and Climate Change set up an industry forum to review the implementation of the Commercial Building Disclosure legislation (mandatory rating legislation).
This group includes Roger Walker, Head of Sustainability at Napier & Blakeley. We are pleased to advise that Roger’s advice that the legislation should exclude buildings which do not have a minimum of 75% office use has been accepted by the Hon Minister Combet.
Future Proofing your Commercial Property
If you are contemplating an upgrade of your office, retail, hotel or industrial property, you may be left with a redundant building if you are not 
considering a sustainable property solution.
Napier & Blakeley offer a wide range of consultancy services that will help you deliver a more efficient and marketable solution for your property. Our services include:
- Energy assessments
- Sustainable design advice
- Government Funding advice
- Project financing options
- Cost Planning and Life Cycle analysis
- Project Management
- Property Tax profiling
