Collaborating online

With most teams now working remotely, we’ve moved client briefings and post inspection feedback sessions online with video conferencing tools such as Zoom.

Drone flyovers and video walkthroughs

As your ability to personally get to site may be restricted, we can arrange video walkthroughs and drone surveys to give you a richer experience of existing building conditions, while adding a deeper dimension to our reporting.

Rethinking the way we do inspections

We’ve adapted our approach to site inspections to accommodate social distancing, shutdowns and travel restrictions. When inspecting construction sites and existing buildings we strictly follow hygiene and social distancing. Group inspections can be broken down to smaller numbers and staggered. Where projects span multiple countries, states and regions, we are making even greater use of our national capability, internal and external subconsultant resources, making better use of local knowledge.

Harnessing the power of 35 years of building intelligence

We have amassed technical property and construction cost data from 35 years of service which can be used for quick and cost-effective benchmarking.  We’ve developed online solutions that generate lifecycle capital expenditure forecasts from new or existing asset registers.  The solution also provides online storage for key documentation such as plans, specifications, operation/maintenance manuals and warranties related to the individual assets or building.  Our schedule of condition app delivers fast, consistent auditing and reporting of spaces, down to the individual room and sub element.  All report data is available for consumption on a client-dedicated website.

There are many things that haven’t changed

In addition to these initiatives there are many things unaffected by current conditions and we still provide these without disruption:

• Design and documentation reviews
• Energy efficiency assessments and improvement plans
• Capital and maintenance expenditure benchmarking
• Feasibility cost estimates
• Tendering assessment and analysis
• Project handover documentation reviews
• Compliance documentation audits

And as always, Napier & Blakeley continue to offer the same fiercely independent, professional view on Cost, Risk and Return.

If you would like further advice on any of the above, please contact any of the following:

NATIONAL Rob Howells National Director o.  03 9915 6300 m. 0437 649 082 e.  rhowells@napierblakeley.com	BRISBANE Gavin Peach Associate Director o.  07 3221 8255 m. 0412 225 781 e.  gpeach@napierblakeley.com .

MELBOURNE Ian Gardner Associate Director o.  03 9915 6300 m. 0488 225 569 e.  igardner@napierblakeley.com	SYDNEY Stephen Cooke Associate Director o.  02 9299 1899 m. 0409 228 552 e.  scooke@napierblakeley.com
.
PERTH Graham Rigby Associate Director o.  03 9915 6300 m. 0419 847 998 e.  grigby@napierblakeley.com	SYDNEY Alastair Walker Managing Director o.  02 9299 1899 m. 0419 503 289 e.  awalker@napierblakeley.com

Napier & 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.

Continue reading …

2016 was quite an incredible year

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.

For 31 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

PERTH
Graham Rigby
Senior Associate
o.   08 9489 4895
m.  0419 847 998
e.   grigby@napierblakeley.com

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.

With local and global acceptance, a Napier & Blakeley Report is also a perfect tool for a vendor to manage the preparation of their property and then present it to the property investment world.

Extending beyond Services Engineers, Chartered Building Surveyors, Building Consultants and Energy Efficiency experts, Napier & Blakelely have in house Quantity Surveyors who produce cost estimates, feasibilities and property tax depreciation reporting.

Here are some recent examples of where our reports have helped facilitate the transaction process:

Call us today, if you would like any more information on Technical Due Diligence and one of our experts below will be able to assist you:

NATIONAL / MELBOURNE
Rob Howells
o.  03 9915 6327
m. 0437 649 082
e.  rhowells@napierblakeley.com

SYDNEY
Simon Gould
o.  02 8113 7112
m. 0409 228 552
e.  sgould@napierblakeley.com

BRISBANE
Gavin Peach
o.  07 3815 0449
m. 0412 225 781
e.  gpeach@napierblakeley.com

PERTH
Graham Rigby
o.  08 9489 4895
m. 0419 847 998
e.  grigby@napierblakeley.com

For 30 years and counting Napier & Blakeley have been providing the following services to the property industry:

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

NAPIER & 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

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.

Over the last few years, Napier & Blakeley has provided Due Diligence on about $10 billion of property investment transactions for international investors.

Since the budget announcement, we have spoken with many of these clients as well as others throughout Asia and all of them have stated that increased cost is one thing – especially when it’s retrospective – but the increased uncertainty about Australia’s investment landscape is their biggest concern. They have said that the MIT debacle has them considering alternative investment destination.

We are also aware that industry bodies such as The Asia Pacific Real Estate Association based in Singapore have been asked by their significant membership investing in Australia, to investigate these changes and lobby on their members behalf.”

Immediately following the Budget, a $1 billion investment prospect was whipped off the table, whilst since then perhaps another $1b has gone cold.

Unfortunately, the MIT withholding rate increases from 7.5% to 15% has won Senate approval, with a concession for new energy efficient buildings.

From 1 July 2012, Managed Investment Trusts that only hold newly constructed energy efficient commercial buildings will be eligible for a 10% tax rate (reduced from 15%).

The concession will be available in relation to office buildings that have obtained a 5-star Green Star rating or a predicted 5.5 star NABERS rating, and retail centres and non-residential accommodation that meet equivalent standards.

This green washing of poor policy is also unfortunate. It appears that the government is missing or has forgotten the point that the single most cost effective way in Australia to reduce energy use is in retrofitting existing buildings.

If any green coating were to be applied, it should have been in this sphere, not new build, especially as most (all) international / institutional grade investment properties will be 5 star anyway.

Incentive for retrofitting is still needed as many building owners don’t appear to ‘get’ the fact that an investment that saves you money is basically the same as an investment that gives you a positive return. Many options for sustainable retrofits provide a 20% – 33% – 50% returns on investment.

Retrofitting has the other benefit of providing for employment quickly in a depressed market, whereas new builds have long lead times.

We believe that it is in the interests of ALL of the property sector to ensure we fight for clarity and transparency and thus we ask Wayne Swan to ……..

“Keep your mitts off the MITs!”

Contact

Transaction & Asset Advisory
Rob Howells – 03 9915 6300 – rhowells@napierblakeley.com
Alastair Walker – 02 9299 1899 – awalker@napierblakeley.com

Sustainable Property Solutions
Peter Frith – 03 9915 6300 – pfrith@napierblakeley.com

Development Advisory & Quantity Surveying
Craig Smith – 03 9915 6300 – csmith@napierblakeley.com
Peter Hammond – 02 9299 1899 – phammond@napierblakeley.com
Paul Cosker – 07 3221 8255 – pcosker@napierblakeley.com

Property Depreciation & Insurance
John Mathew – 03 9915 6300 – jmathew@napierblakeley.com
Paul Mazoletti – 07 3221 8255 – pmazoletti@napierblakeley.com

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.

”It not just flies in the face of the plan to make Australia the hub of finance in Asia, but the move suddenly places Australia on the list of countries with significant ‘sovereign risk’,” he said. ”As a result, Australia is no longer considered so transparent and predictable.”

His comments followed similar remarks last month by The Trust Company, a leading property and infrastructure custodian, that the action put Australia’s status as a prime investment destination in doubt.

Mr Frith said immediately after the budget, a $1 billion investment prospect was whipped off the table. ”Since then more than $1 billion appears to have gone cold,” he said.

”Napier & Blakeley believes it is in the interests of all of the property sector to ensure we fight for clarity and transparency and ask [Treasurer] Wayne Swan to keep his mitts off the MITs.”

Napier & Blakeley’s joint managing director, Alastair Walker, said the ”MIT debacle” was raised in every meeting he attended during a recent visit to Singapore to meet clients and property advisers.

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

Mr Walker said that in the past few years, Napier & Blakeley had provided due diligence on more than $10 billion worth of property investment transactions.

The Trust Company has been responsible for more than 30 managed investment trusts with $5 billion of direct investment in Australia since the MIT legislation was introduced in 2008.

Andrew Cannane, The Trust Company’s head of corporate client services, told Business Day from Singapore that since the budget measure, there had been a hiatus as people held off.

”I don’t think investment in Australia will dry up, but we will see less investment via the MIT structure,” he said.

Research by Colliers International found that since the government cut the WHT rate to 7.5 per cent in 2007-08, foreign investment in Australian commercial property markets rose from $1.2 billion in 2008 to $5.5 billion last year.

Written by Philip Hopkins
Displayed on the following websites – June 30, 2012
Sydney Morning Herald
WA Today
Canberra Times
Brisbane Times
The Age

In the last year Napier & Blakeley

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.

The other more recent trend that has pretty well become standard during due diligence is the of analysis of energy consumption and modelling future asset potential to reduce energy. This trend is driven by rent, NABERS disclosure legislation and also with the future cost of energy in mind.

Over the last 2 years the federal Government ran the Green Building Fund initiative which provided up to 50% of the expenditure required by an owner to sustainably retrofit their asset.

This initiative was worth approximately $120m so therefore an overall value of retrofitting projects of $240m. We estimate conservatively that there could be well in excess of $2b worth of retrofit requirements, especially when you consider that 35-40% of the rental marketplace are Government type tenants that require minimum 4 to 4.5 star NABERS rated assets to lease. As an example, there are many Premium and A Grade commercial offices that are substantially below that level of rating, some hovering at around a 1 star NABERS rating.

Contact

If you want further information on due diligence and capital expenditure forecasts, or any other Napier & Blakeley services please contact any of our offices below:

Melbourne - Rob Howells            03 9915 6300             rhowells@napierblakeley.com
Sydney – Gavin Peach                02 9299 1899              gpeach@napierblakeley.com

Napier & Blakely services:

• Technical Due Diligence
• Capital Expenditure Planning
• Quantity Surveying
• Strategic Asset Management
• Building & Sustainability Consulting
• Property Depreciation

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.

2.  Physical Elements

Physical revisions or changes will be made in certain areas including:

• Access and egress
• Signage
• Lift installations
• Sanitary and other facilities

3.  Exemptions

There are exemptions to compliance with the Premises Standards such as in cases of unjustifiable hardship.

Unjustifiable hardship is not defined in the Act or in the Premises Standards and therefore is dependant on the specific circumstances in each case.

The Premises Standards provides a list of factors that may be taken into account in determining whether there is an “unjustifiable hardship” including cost, loss of value, and impact on revenue, technical building factors and benefits of access.

It is highly unlikely that the mere imposition of additional cost is sufficient to find an unjustifiable hardship.

4.  Compliance

Compliance will be achieved principally through the normal building certification process and therefore if buildings are designed and constructed according to the requirements of the revised BCA, compliance with the Premises Standards and the Act should be achieved.

5.  Non Compliance

The Premises Standards do not specifically set out penalties or consequences for failure to comply. However, there are likely to be a number of serious consequences including:

• Inability to obtain building approval if non compliant with the Premises Standards; and
• Where the premises is constructed, the possibility of a claim of discrimination.

Contact

If you want further information on how these new Disabled Access Standards will apply to your new constructions, building works or alterations, or any other Napier & Blakeley services please contact any of our offices below:

Melbourne – Rob Howells
03 9915 6300
rhowells@napierblakeley.com

Sydney – Gavin Peach
02 9299 1899
gpeach@napierblakeley.com

Napier & Blakeley services:

• Technical Due Diligence
• Capital Expenditure Planning
• Quantity Surveying
• Strategic Asset Management
• Building & Sustainability Consulting
• Property Depreciation

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. 

Risk of Non-Compliance 
New legislation requires that most commercial office property will be required to have a formal energy performance rating in the next few years and many will require this imminently or in the next few months.  This Legislation has caught most by surprise.  The Building Energy Efficiency Disclosure Act 2010 has just been introduced with transitional provisions (1 November 2010 to 30 October 2011) requiring the disclosure of a building’s energy performance through a NABERS Energy base or whole building rating, for all commercial office property with a net lettable area of 2,000sqm or more that is offered for sale or lease. 

Anxious Vendors
With fines in excess of $100,000 for breaches of the Act’s obligations; including advertising the property for sale or lease, after November 1 2010 without an appropriate NABERS Energy rating, there is significant anxiety in the market place.  The latest information from the Department of Climate Change and Energy Efficiency (DCCEE) will surely increase anxiety levels, as they have confirmed that neither exemptions nor extensions will be granted for lack of knowledge or where assessments are currently underway but not yet completed.

 It will be interesting to see how owners, selling and leasing agents and DCCEE react. 

Astute Purchasers
The story doesn’t end once the rating has been achieved.  Purchasers want to know about the processes and procedures that owners have in place, the potential risks of maintaining the rating at the current level and what plans are in place, or could be implemented, to improve the rating, perhaps strategically in line with planned Capex or future lease expires.

Such initiatives are considered in terms of funding opportunities, reduced energy costs, pay back periods and commercial outcomes. 

Published in the Brisbane Legal Magazine November 25, 2010