Recent Trends in Technical Due Diligence
Is your ‘too good to be true’ deal really sustainable ?
Lack of Capital post GFC has lead to a significant neglect of R&M and Capex spend.
Having worked on property due diligence valued over $10B since the GFC, Napier & Blakeley have seen only nominal spend on upkeep compared with previous years.
Risk of Non-Compliance (i) 
During this period the increasing trend has been a notable reduction of Repair and Maintenance (R&M) and Capital Expenditure (Capex) budgets. Whilst this strategy may have been necessary in some circumstances e.g. postponement of non-essential Capex, we have found too commonly evidence of non-compliance regarding statutory maintenance such as testing, auditing and reporting of essential safety measures and fire safety systems.
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.
Commercial Building Disclosure (CBD)
Commercial Building Disclosure (CBD) is a national program designed to improve the energy efficiency of Australia’s large office buildings.
The disclosure requirements under the CBD program will commence on 1 November 2010.
The CBD program will ensure that credible and meaningful energy efficiency information is available to prospective purchasers and lessees of large commercial office space. Owners and lessors of commercial office space with a net lettable area of 2,000m² or more will be required to disclose energy efficiency information to prospective purchasers and tenants when the space is to be sold, leased or subleased.
Transitional Provisions
The legislation contains transitional provisions that will apply for the first twelve months of the program (i.e. from 1 November 2010 to 30 October 2011). During this period, a valid National Australian Built Environment Rating System (NABERS) Energy base or whole building rating, must be disclosed. After the transition period, a full Building Energy Efficiency Certificate (BEEC) is required to be disclosed.
