Managing Cost & Risk
Renowned for their expertise in Property Development and Infrastructure Consultancy, Napier & Blakeley, an independent project certifier, delivered exceptional service while on the Oracle project, Queensland.
This project required highly skilled technical knowledge and a team of 4 – 5 professionals working collectively to provide well rounded solutions in all facets of quantity surveying, property depreciation services, property insurance reinstatement cost assessment and syncing of fund budgets and financiers reporting.
Ready results to overcome obstacles, was dealt swiftly by the team of Napier & Blakeley. Reporting to a syndicate of multiple financiers and stake holders and monitoring all aspects of cost on a project of this size and nature may be daunting to some but to Napier & Blakeley this was dealt with finesse, professionalism and efficiency. Maintaining their independence and working relationships with the three major key stake holders Grocon, Niecon and financiers required exceptional communication and complex relationship skills; Napier & Blakeley were able to skilfully furnish these abilities effortlessly.
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
