We take great pleasure in announcing that Michael Ross has become a Director of Napier & Blakeley.

Michael joined Napier & Blakeley in September 2021 and leads our National Tax Depreciation and Insurance advisory business.

Michael is a highly regarded advisor and is the first port of call for clients requiring fixed asset registers and tax depreciation advice for construction, property transactions and capital expenditure projects – and reinstatement cost assessments for insurance purposes.

Michael works closely with Napier & Blakeley’s Quantity Surveying, Building Consulting and Sustainability, Climate & ESG teams with the aim of helping property investors to get the best returns from their property.

Please contact Michael for any assistance or advise relating to Fixed Asset Registers, Tax Depreciation or Insurance valuations.

Regardless of the geographical location of your assets, our team of professionals, strategically positioned across Australia and New Zealand, is adept at managing the due diligence process, from individual assets to extensive property portfolios, always keeping you informed and meeting critical transaction timelines.

Our proficiency extends to identifying material risks, accurately estimating associated costs, preparing Reinstatement Cost Assessments for insurance purposes, executing Tax Depreciation analysis to help optimise returns, and providing Cost Estimates for future refurbishments or redevelopment plans.

Drawing from a wealth of historical data and expertise in diverse property assets, we are well-prepared to navigate complexities and provide benchmarking insights.  Our independence from the transaction process and property management offers a level of impartiality valued by vendors and trusted by purchasers.

These images highlight some recent properties we’ve assessed reinforcing our presence and expertise across the property market.

Choose Napier & Blakeley for responsive and reliable experience in your commercial property endeavours and contact us as below.

NATIONAL
Rob Howells, Managing Director | 0437 649 082 | rhowells@napierblakeley.com
Coco Williams, National Head of Client Services | 0418 348 712 | cowilliams@napierblakeley.com

MELBOURNE
Steven McCormack, Senior Associate | 0407 892 290 | smccormack@napierblakeley.com

SYDNEY
Stephen Cooke, Associate Director | 0409 228 552 | scooke@napierblakeley.com

BRISBANE
Gavin Peach, Associate Director | 0412 225 781 | gpeach@napierblakeley.com

PERTH
Graham Rigby, Associate Director | 0419 847 998 | grigby@napierblakeley.com
 
ADELAIDE
Sam Grindley, Senior Associate | 0460 032 142 | sgrindley@napierblakeley.com

NEW ZEALAND
Daniel Small, Director | +64 20 493 6595 | dsmall@napierblakeley.com

Property investors will see an extension to the effective lives of Plant & Equipment assets while others maybe reduced or deleted resulting from recent changes to the tax rulings for residential properties purchased from 1 July 2019. The effective life of an asset refers to the length of time an asset can be depreciated.

Newly built properties will be the most impacted, as investors can claim depreciation allowances for Plant & Equipment Division 40. Older or second-hand residential properties purchased after 9^th May 2017 can claim depreciation on new equipment bought to improve the properties.

In total 32 items have been changed or added to the effective life asset list in TR 2018/4 as per Section 40-95 of the Income Tax Assessment Act 1997 for residential property owners (ANZSIC 67110).

“I have assessed the list and found the depreciation life of 16 assets has been reduced. A further 16 new items have been added to the list and are eligible for inclusion,” said Paul Mazoletti, National Director, Napier & Blakeley.

“Some investors will benefit from the new assets with extra items included in their tax schedules to depreciate over time. While other assets will have a reduced life; effectively improving the value of their assets to claim.

“The good news is the ruling is grandfathered. Fortunately not impacting existing owners of residential investment properties purchased before 1 July 2019. But it will affect depreciation allowances for plant & equipment purchased to upgrade properties and improve their value through renovations.

“Overall, investors will find they’re better off claiming depreciation allowances. Our clients have offset rental income and saved thousands in personal income tax. It makes good business sense to use all means at your disposal to achieve a profitable return on your investment,” said Mr Mazoletti.

Some of the Plant & Equipment Assets affected by the changes include:

• floor coverings, carpet – 8 years
• home automation control assets – 10 years
• hydronic assets, water heater – 15 years
• skylights controls and motors – 10 years each
• dishwasher, microwave ovens and washing machine – 8 years each
• and clothes dryer -  7 years
• swimming pool assets, blankets – 8 years
• chlorinators, filtration including pumps -  10 years each.

All property investors are reminded to keep accurate records of their plant & equipment purchases as well as expenses incurred in carrying out capital works to assist Quantity Surveyors or Tax Analysts prepare accurate and comprehensive depreciation schedules.

Reference Australian Taxation Office / Capital Allowances  www.ato.gov.au

	BRISBANE Paul Mazoletti National Director o.  07 3221 8255 m. 0408 749 202 e.  pmazoletti@napierblakeley.com		SYDNEY Peter Osborn Director o.  02 9299 1899 m. 0439 765 571 e.  posborn@napierblakeley.com
	BRISBANE Kath Hemphill National Residential Manager o.  1300 730 382 m. 0409 722 709 e.  khemphill@napierblakeley.com		MELBOURNE John Mathew Director o.  03 9915 6300 m. 0414 559 326 e.  jmathew@napierblakeley.com

For 34 years Napier & Blakeley have been providing the following services to the property industry:

• Property Acquisition & Disposal Technical Due Diligence
• Property Development Due Diligence
• Quantity Surveying
• Capital Expenditure Forecasting
• Make Good Reporting
• Energy Management
• Development Monitoring
• Property Tax Depreciation

Please contact any of the people below for more information or assistance:

SYDNEY

	Alastair Walker Managing Director m. 0419 503 289 e.  awalker@napierblakeley.com		Peter Hammond Director m. 0419 980 901 e.  phammond@napierblakeley.com
	Peter Osborn Director m. 0439 765 571 e.  posborn@napierblakeley.com		Stephen Cooke Associate Director m. 0409 228 552 e.  scooke@napierblakeley.com

MELBOURNE

	Craig Smith Director m. 0407 371 664 e.  csmith@napierblakeley.com		Rob Howells National Director                             . m. 0437 649 082 e.  rhowells@napierblakeley.com
	John Mathew Director m. 0414 559 326 e.  jmathew@napierblakeley.com		Ian Gardner Associate Director m. 0488 225 569 e.  igardner@napierblakeley.com
	Richard McOmish Associate Director m. 0409 478 460 e.  rmcomish@napierblakeley.com

BRISBANE

	Paul Mazoletti National Director m. 0408 749 202 e.  pmazoletti@napierblakeley.com		Gavin Peach Associate Director                           . m. 0412 225 781 e.  gpeach@napierblakeley.com
	Adam Greene Associate Director m. 0409 724 395 e.  agreene@napierblakeley.com		Paul Cosker Associate Director m. 0434 400 107 e.  pcosker@napierblakeley.com

PERTH

	Graham Rigby Associate Director m. 0419 847 998 e.  grigby@napierblakeley.com		Nick Taylor Senior Associate                       . m. 0418 337 225 e.  ntaylor@napierblakeley.com

ADELAIDE

John Mathew Director                                                                                                   . m. 0414 559 326 e.  jmathew@napierblakeley.com

There are a number of questions to be answered:

• Are there any priority issues that need to be managed?
• What needs to be repaired, replaced or improved?
• When do these need to be done?
• What could safely be deferred?
• How much will it cost?
• What will be the return?

Napier & Blakeley have developed software which enables the allocation of budget forecasts as well as the associated tax depreciation benefits that may follow. These forecasts can be viewed by individual asset, by level, or tenancy, by whole building and by whole portfolio, providing an holistic insight to manage expenditure and priorities.

The initial assessment process is made possible by our Services Engineers, Building Consultants and Quantity Surveyors who have current cost information to produce cost estimates and property tax depreciation reporting aligned to the commercial goals of your business and intentions for the property.

Planning your capex strategy can increase your property’s potential:

• Needs can be prioritised.
• Cash flow can be improved through capital allowances and tax depreciation.
• Valuations can be improved.

There are many drivers for capital expenditure and some of the considerations include:

• Age, condition and remaining useful life of the structure, fabric and the building services.
• Performance of plant and equipment such as lifts and air-conditioning.
• Obsolescence, attractiveness to tenants and market positioning.
• Highest and best use.
• Compliance with Building Code, Premises Standards, accessibility, WHS and Environmental and Hazardous Materials.
• Statutory Compliance of the Essential Safety Measures and Building Energy Efficiency Certificates (BEEC) and NABERS prior to leasing or sale.

Here are some recent project examples:

		COMMERCIAL OFFICE PORTFOLIO OF 19 ASSETS – NATIONWIDE Including 108 St Georges Terrace, Perth WA CLIENT:  Brookfield SERVICE COMMISSION: Life Cycle Assessment, 10 year Capital & Maintenance Expenditure Forecast, Asset Registers and associated Tax Depreciation assessments
		RETAIL PROPERTY PORTFOLIO OF 14 ASSETS – NATIONWIDE Including Highpoint Shopping Centre, Maribyrnong VIC CLIENT:  The GPT Group SERVICE COMMISSION: Life Cycle Assessment, 10 year Capital & Maintenance Expenditure Forecast
		PRIVATE HOSPITAL PORTFOLIO OF 20 ASSETS – NSW, VIC, QLD, SA Including Robina Private Hospital, Robina, QLD CLIENT:  Australian Unity SERVICE COMMISSION: Life Cycle Assessment, 10 year Capital & Maintenance Expenditure Forecast
		6 STAR AGED CARE AND INDEPENDENT LIVING, VAULCLUSE Including 2 Laguna Street, Vaucluse, NSW CLIENT:  Mark Moran Group SERVICE COMMISSION: Life Cycle Assessment, 10 year Capital & Maintenance Expenditure Forecast
		AGED CARE AND RETIREMENT LIVING PORTFOLIO, NSW & QLD Southern Cross Care Residential Aged Care, Daceyville NSW CLIENT:  Southern Cross Care SERVICE COMMISSION: Life Cycle Assessment, 10 year Capital & Maintenance Expenditure Forecast
		COMMERCIAL OFFICE PORTFOLIO, NSW & QLD Including 50 Pitt Street, Sydney NSW CLIENT:  Mirvac SERVICE COMMISSION: Life Cycle Assessment, 10 year Capital & Maintenance Expenditure Forecast

Our Transaction Advisory team is able to provide the following services for your projects:

• Land transaction technical due diligence
• Project / development monitoring
• Property transaction technical due diligence and benchmarking
• Property condition assessments
• Capital and maintenance expenditure forecasts
• Operational performance reviews and expenditure analysis
• Energy efficiency assessments
• Building improvement reports
• Environmental and hazardous materials assessments
• Regulatory compliance reports, BCA, OHS/WHS, ESM
• Town planning reports
• Land and lease surveys
• Indicative property depreciation schedules
• Replacement cost estimates
• Landlord and tenant dilapidations
• Make good assessments and negotiations

Please do not hesitate to call us to discuss your project:

NATIONAL Rob Howells o.  03 9915 6300 m. 0437 649 082 e.  rhowells@napierblakeley.com	PERTH Graham Rigby p.  08 9489 4895 m. 0419 847 998 e.  grigby@napierblakeley.com
SYDNEY Peter Osborn o.  02 9299 1899 m. 0439 765 571 e.  posborn@napierblakeley.com	BRISBANE Gavin Peach o.  07 3221 8255 m. 0412 225 781 e.  gpeach@napierblakeley.com

For 33 years and counting Napier & Blakeley have been providing the following services to the property industry:

• Property Acquisition & Disposal Technical Due Diligence
• Property Development Due Diligence
• Quantity Surveying
• Capital Expenditure Forecasting
• Make Good Reporting
• Energy Management
• Development Monitoring
• Property Tax Depreciation

Please contact any of the people below for more information or assistance:

SYDNEY Alastair Walker Managing Director o.  02 9299 1899 m. 0419 503 289 e.  awalker@napierblakeley.com	MELBOURNE Craig Smith Director o.  03 9915 6300 m. 0407 371 664 e.  csmith@napierblakeley.com
BRISBANE Paul Mazoletti National Director o.  07 3221 8255 m. 0408 749 202 e.  pmazoletti@napierblakeley.com	SINGAPORE Peter Mitchell Chairman o.  +65 6550 9642 m. +65 9670 9435 e.  pmitchell@napierblakeley.com

Our offices will close at 4pm on Wednesday 23rd December and reopen on Thursday 7th 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

So where will all of this leave us in 2009 and beyond?

We are now in a Catch 22 market, which will make for an interesting year all round in property and development in Australia.

Property

There is an inordinate amount of property on the market nationally, from residential housing and apartment’s right through to large retail and commercial properties and any number of development opportunities across all sectors of the market.

The problem is credit and debt funding. Australian banks no longer have the cash funds and backing they previously had from the larger offshore investors which makes it much more difficult for them to lend causing them to adjust their lending criteria.

We are aware of a recent example where a blue chip client, with AAA rated companies and virtually no debt, was unable to secure debt finance from their banker of more than ten years to develop a commercial office building in which they would have taken more than 50% of the available space. In another development funding application of only $20m, it was suggested that the $20m be syndicated across four lenders at $5m each – unheard of in recent years.

The Australian property market is still in a state of adjustment (and shock) with valuers increasing yields almost on a daily basis leaving vendors with difficult questions to answer – should I sell, do I need to sell, will I be forced to sell and are there buyers at that price ?

In coming years it is entirely possible that we will see a few ‘super property groups’ who, in conjunction with the banks as partners/managers in legacy JV’s, are unable to sell or don’t want to manage property investments they’ve inherited. This scenario is certainly potentially bad news for tenants, but as banks will inherit distressed property that they cannot sell or entire property companies ,,it may be inevitable..

Markets, of course, always have two sides and there are a significant number of cashed up investors large and small, local and foreign , who are asking the same questions but in reverse; ie; ”How far will prices fall and yields go up?” As a good old Jewish client of mine said to me recently, I have my wallet out but I’ve not yet opened it!

Overseas investors still look at Australia as a prime investment target; we have legal certainty, a sophisticated property system and opportunity for growth before many other countries around the globe.

There have been a few recent examples of cashed up private investors plunging in for large retail assets in excess of $80m at yields of 8.5%, but there are also lots of willing buyers with cash who are still unable to secure debt finance from the banks.

Development

If you are sitting on development land, where are construction costs going this year? Simple, they are going down – maybe by as much as 10% in certain geographic and sector areas.

Facts; unemployment will rise and the availability of skilled and unskilled labour will go up, subcontractors’ margins will come down, builders’ small and large will have their order books slashed and this will, along with the current lower cost of fuel, decrease the cost of a raft of other items.

A weaker A$ will cause imported materials and machinery to stay up in price, however generally our prediction is that costs for new start projects will be lower than they have been for some time.

Council Planning departments, who have been overworked in recent times, should be able to process development applications in record time as the number of applications reduce, therefore reducing holding costs and making development generally more affordable.

So if you can finance your development (and maybe make a few sales) this will be the year to strike a deal to build.

A final note – Government and Superannuation

Every negative statement made by our politicians, journalists and industry pundits, causes many of these cashed up investors to sit back once more and wait for the self-perpetuation process to continue, fuelling the continued loss of confidence by making banal statements is now verging on the irresponsible.

In the early 1980’s and again in the early 1990’s the Federal government analysed and then increased the benefits of building and depreciation allowances – which in turn lead to increased levels of development and investment buying – which in turn stimulated the jobs market and brought much needed revenue into State and local governments through increased stamp duty revenue and the like. Food for thought rather than a Pokie windfall !

If we assume that over 10 million people are in employment in Australia with an average wage of around $50,000, a 9% super contribution equates to $45 billion dollars in contributions over the last year.

Fifty percent of these funds are probably sitting in cash as the superannuation funds have been shy of the equities market in the last six months and their exposure ratios to property, even with the downgrading of property values, has gone up in most cases well above their comfort/risk levels, so they will not invest in property whether it offers good growth potential or not.

It’s an interesting conundrum for the superannuation sector and indeed the Federal Government. The funds are shy of taking risks to protect their stakeholders retirement, however as they have lost a huge amount of their stakeholders funds anyway by being conservative, should they play a part in creating growth, future wealth and assist the country in staving off recession ?

By definition a significant portion of superannuation contributors will not receive their retirement benefit for 20-30 years. Surely such a long term return requirement enables the funds to take some longer term positions enabling to play a positive role in re-building the confidence required in the economy?

Fasten your seatbelts and hang on for the ride.

Summer time is a great time to take stock of your business and a great time to think about and diarise some property housekeeping issues that quite often get overlooked in the bustle of normal day to day business.

However if you consider this now, you can plan to carry out some crucial housekeeping duties in January when business is traditionally quieter.

Some of the not so sexy but absolutely essential items to consider to maximise your return and minimise your cost and risk are as follows:

Property Replacement Insurance: given the sizeable increases in construction costs in recent times, have you considered whether your properties are correctly insured? Do you know what you are insuring: base building and / or fit out?

Capital Expenditure Planning: what items have you planned over the next calendar year? How will they be managed?

Maintenance: are your maintenance contracts up to date and appropriate? Are there any routine maintenance items that can be efficiently attended to in this quiet time?

Tax and asset updates: Is your base schedule correct? Have you carried out any upgrade works during the financial year to date for which you can claim either a tax write off or a future tax deduction?

Condition Audits: Do you need to create or update any condition surveys of your tenanted properties?

Tenancy Make Good: Do you have a schedule of lease expiries that will occur during the year? Are there any “repairing and make good” obligations that need to be planned with the tenant?

N&B can assist with all of the above to help you really enjoy your summer holiday.

Burj Dubai (“Dubai Tower“) is a super-tall skyscraper currently under construction in Dubai, United Arab Emirates. According to its developers, It is currently the tallest free standing structure in the world, surpassing the CN Tower in Toronto, Ontario, Canada which previously held the record for 32 years. When it is completed in early 2009, it is predicted to be the tallest man-made structure in the world, as well as the tallest building by any measure.

While the final height of the building is a closely guarded secret, sources claim that it will measure approximately 818m, however this information is disputed.

Scheduled for occupancy in September 2009, the building is part of a 2 km² (0.8 sq mi) development called ‘Downtown Burj Dubai’ .

Burj Dubai’s last two milestones will be to surpass the 628.8 m (2,063 ft) height of the KVLY-TV Mast in North Dakota, United States to become the world’s tallest structure, and to pass the Warsaw radio mast in G?bin, Poland (646.4 m (2,121 ft) until it collapsed in 1991) to become the world’s tallest structure of any type ever built.

However, it is not simply the tall buildings that are making headlines.

The City Centre Las Vegas

The CityCenter will be a mixed-use 76-acre complex (16,797,000 square feet (1,560,500 m²)) on the Las Vegas Strip in Las Vegas, Nevada, currently under construction by MGM Mirage.

With a total cost expected to exceed $7.8 billion, CityCenter is the largest privately financed development in the United States. The original cost estimate was $4 billion, but it was pushed up by rising construction costs and design changes.

The project had an initial employee estimate of 12,000 people.