This process extends beyond just like for like capex forecasting, as we delve much deeper to highlight potential opportunities an asset may have which could enhance future returns.

Sub-regional shopping centres and urban infill projects, as an example, often feature large parcels of underutilised land in areas of growing population. These locations can be ideal for developing new assets such as medical facilities, childcare, education, foodoutlets, retail, and housing.

Assets can be performing well and yielding strong returns, but may also have further development potential presenting further revenue opportunities for the owners.

In addition to evaluating the technical and environmental risks of existing properties, our Technical Due Diligence service also involves investigations such as:

• Verifying legal boundaries and identifying encroachments or easements that may impactfuture development.
• Assessing ground conditions and their effect on structural integrity.
• Structural evaluations to enable design planning
• Evaluating town-planning opportunities and challenges.
• Considering historical and future climate risks to ensure resilience and future-proofing.
• Estimating overall feasibility costs.

This overall approach not only manages acquisition cost and risk, but also highlights future potential returns.

Don’t risk the potential of your future, contact us now:

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, Associate Director | 0460 032 142 | sgrindley@napierblakeley.com

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

Are you aiming to enhance the sustainability and efficiency of your building?

NABERS is currently offering grants across various sectors, including apartment buildings, hotels, residential aged care, retirement living, office tenancies, warehouses, and cold stores.

Our experienced assessors can assist you in the application process and subsequently carry out NABERS ratings along with associated improvement plans.

This comprehensive service not only enhances your chances of grant approval but also ensures your asset operates efficiently and sustainably, thereby maximising returns and minimising investment risks.

Grants of up to $4,500 per building (excluding GST) are available for first-time energy and water ratings. The NABERS funding covers consecutive ratings and initial improvement plans, representing approximately 50-60% of the project value over a span of 12-18 months. This opportunity is specifically for Energy and Water Ratings in NSW.

Ready to take a leap towards sustainability and elevate your asset’s performance? N&B possesses the expertise to assist you. Act now, as applications close on June 30, 2024.

For further information, contact:  Ian Gardner  |  0488 225 569  |  igardner@napierblakeley.com 

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.

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

Graham joined Napier & Blakeley in July 2015 and manages our Building Consulting team in Western Australia.

Graham is a good friend and trusted advisor to local and international property investors, owners, and managers, who require Development Monitoring, Technical Due Diligence, Building Condition, Capital & Maintenance Expenditure Forecasts and lease expiry Make Good advice.

Graham makes regular contributions to the industry through RICS and is instrumental to Napier & Blakeley’s in-house structured training and our Regulated by RICS status.

Graham works closely with our Quantity Surveying, Tax Depreciation & Insurance, Sustainability, Climate & ESG teams to help investors make good informed decisions about the physical risks and opportunities of their property investments and portfolios.

Please contact Graham for any Building Consulting advise in Western Australia.

Relying solely on Consumer Price Index (CPI) changes to form the basis of your building insurance cover could leave you under insured and vulnerable.  Why?

As experienced Quantity Surveyors, Napier & Blakeley stands apart as trusted industry providers. We have appropriate Professional Indemnity insurance to support the provision of advice around Reinstatement Cost Assessments and with nearly four decades of leadership, we offer:

• Real-time cost data from over 500 construction projects annually;
• Expertise in estimating project costs including demolition, professional fees, timelines and cost escalations; and
• Wealth of experience and support from property investors, legal and financial sectors, government agencies, and numerous clients.

Ensure your assets are properly protected. Trust N&B for tailored guidance on insurable values, backed by unparalleled expertise.

Let us help you manage your risks with accurate Reinstatement Cost Assessments.  Contact our team today.

NATIONAL
Rob Howells, Managing Director | 0437 649 082 | rhowells@napierblakeley.com
Craig Smith, National Director of Quantity Surveying | 0407 371 664 |  csmith@napierblakeley.com
Coco Williams, National Head of Client Services | 0418 348 712 | cowilliams@napierblakeley.com
Michael Ross, National Head of Tax | 0403 841 175 | mross@napierblakeley.com

MELBOURNE
John Atkins, Director | 0456 644 052 | jatkins@napierblakeley.com

SYDNEY
Peter Hammond, Director | 0419 980 901 | phammond@napierblakeley.com

BRISBANE
Paul Cosker, Director | 0434 400 107 | pcosker@napierblakeley.com

PERTH
Scott Muirden, Director | 0450 393 099 | smuirden@napierblakeley.com
 
ADELAIDE
Sam Grindley, Associate Director | 0460 032 142 | sgrindley@napierblakeley.com

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

New Director Daniel Small

After 38 years, we have crossed the ditch and are now open for business in Auckland & Christchurch providing quantity surveying, tax depreciation and technical due diligence services to property developers, financiers and investors.

This geographic expansion will complement our other teams in Melbourne, Sydney, Brisbane, Perth and Adelaide, confirming our ability to provide our services throughout Australasia.

Napier & Blakeley will be led by local Director, Daniel Small.  Daniel was an architectural builder before retraining as a quantity surveyor.  He worked in New Zealand as a quantity surveyor before spending the past few years working in the Melbourne Napier & Blakeley team with Directors Craig Smith and John Atkins.  During this time, Daniel gained experience in a wide range of sectors including residential, commercial, retail, childcare & land subdivisions.

Daniel has been very active in research into upfront embodied carbon and has played an active role in developing our service offering in this space.

Daniel’s areas of expertise include:

?  Cost Planning
?  QS Financier Reporting
?  Embodied Carbon Measurement
?  Pre-tender Estimates
?  Value Management
?  Schedules/Bills of Quantities
?  Tendering
?  Tender Reviews
?  Procurement
?  Engineer to the Contract/Superintendent
?  Reinstatement Cost Assessments

Please contact Daniel for any Quantity Surveying advice in New Zealand

Our business has expanded, and with that growth comes an increased demand to serve our clients.  Engaging exceptional individuals with the right skill set, experience, and dedication is the cornerstone of fulfilling our commitments to our clients.  Allow us to introduce our new team members.

Promotions

At Napier & Blakeley, we value talent and believe in recognising and rewarding it appropriately.  Please join us in congratulating our colleagues across our offices on their recent promotions.

Career Opportunities

We’re always on the look out to add to our talent pool, if you know of a property/construction professional wanting to join our dynamic team and advance their career, please share our newsletter and contact details.

MELBOURNE
Rob Howells, Managing Director | 0437 649 082 | rhowells@napierblakeley.com
Coco Williams, National Head of Client Services | 0418 348 712 | cowilliams@napierblakeley.com
Peter Frith, Director | 0437 649 082 | pfrith@napierblakeley.com
Craig Smith, Director | 0407 371 664 | csmith@napierblakeley.com
Ian Gardner, Director | 0488 225 569 | igardner@napierblakeley.com
John Atkins, Director | 0456 644 052 | jatkins@napierblakeley.com

SYDNEY
Alastair Walker, Director | 0419 503 289 | awalker@napierblakeley.com
Peter Hammond, Director | 0419 980 901 | phammond@napierblakeley.com
Michael Ross, National Head of Tax | 0403 841 175 | mross@napierblakeley.com
Stephen Cooke, Associate Director | 0409 228 552 | scooke@napierblakeley.com

BRISBANE
Paul Cosker, Director | 0434 400 107 | pcosker@napierblakeley.com
Gavin Peach, Associate Director | 0412 225 781 | gpeach@napierblakeley.com
KY Pih, Associate | 0408 933 660 | kpih@napierblakeley.com

PERTH
Graham Rigby, Associate Director | 0419 847 998 | grigby@napierblakeley.com
Scott Muirden, Director  |  0450 393 099  |  smuirden@napierblakeley.com

ADELAIDE
Sam Grindley, Associate Director | 0460 032 142 | sgrindley@napierblakeley.com

The construction market over the past 12 months has again been a challenging one, according to Napier & Blakeley’s latest Construction Costs Datacards, and the firm still expects upward pressure on costs to continue in the short to medium-term.

“However, in regard to the recent significant price increases in some material prices, whilst we believe the worst is over, we still expect some upward pressure on costs to continue, with the market taking some time to assess that the risk and rate of significant future price increases are over or at least reduced,” director Craig Smith said.

Napier & Blakeley’s current cost escalation forecast for the 2024 financial year is 5% to 8% for residential construction, relating to timber framed buildings, and 5% to 7% for commercial construction – excepting Western Australia and Queensland, where it is tipping cost escalation to be in the order of 6% to 8% for residential construction and 7% to 9% for commercial construction.

“The construction market over the past 12 months has again been a challenging one with the market experiencing strong cost increases in the second half 2022. In the first half of 2023, the material cost increases have calmed however they still exist with a premium on labour costs now more of the focus,” Smith added.

Contractors continue to include cost escalation in their tender, the report found. Shipping costs are reducing, while reinforcement and steel prices are steadying, however building services works, brickwork, concrete, precast concrete, precast concrete and plasterboard prices are increasing.

Some sub-contractors are supplying labour-only quotations to contractors, with the contractor therefore required to purchase materials and absorb the risk of the cost increases of materials, while there are general inflationary prices on the cost of labour.

The costs data have been sourced from around 600 projects that Napier & Blakeley advised on last year.

Residential construction

Single Sydney homes up to 250 sqm cost $1,500 to $2,400 per sqm to build, according to Napier & Blakeley’s Construction Costs Datacards, compared to Melbourne and Adelaide’s narrower $1,800 to $2,100 per sqm.

For south east Queensland, the cost is $1,220 to $1,875 per sqm, while in Perth’s it’s $1,725 to $2,050.

A medium-standard two-storey townhouse costs $2,200 to $3,000 per sqm to build in Sydney. In Melbourne it costs $2,100 to $2,525. Adelaide and Perth builds both come in at $2,000 to $2,500 per sqm, and south east Queensland $1,450 to $2,375.

Three-storey apartments built to a medium standard cost $2,350 to $3,250 per sqm, while in Melbourne it will cost between $2,800 and $3,250. South east Queensland builds will cost $2,275 to $3,075 per sqm, just a clip above that in Adelaide, and from $2,650 to $3,125 per sqm in Perth.

Office construction

A-grade 20-storey-plus offices cost $4,800 to $6,300 per sqm to build in Sydney, well above its peers. In south east Queensland it’s $4,100 to $5,400, in Melbourne it’s $3,700 to $4,400, Adelaide is $3,400 to $3,950, while in Perth is can range from $3,875 to $4,740 per sqm.

Medium-grade offices up to 20 storeys range from $3,700 to $4,800 per sqm in Sydney to $3,000 to $3,600 in Adelaide.

Retail construction

Melbourne, Adelaide and Sydney are the most expensive places to construct the shell of a suburban specialty shop, at $1,800 to $2,300 per sqm for Melbourne, $1,700 to $2,100 for Adelaide respectively, and between $1,550 and $2,450 in Sydney. In Perth it’s $1,620 to $2,000, while in south east Queensland it’s $1,325 to $1,825.

A medium-standard suburban enclosed mall in Sydney costs $2,350 to $3,400 per sqm, while Melbourne is $2,500 to $3,000. Adelaide is $2,400 to $2,750, Perth is just a tick under, and south east Queensland is $2,175 to $3,375.

Industrial construction 

To build a medium-standard precast wall warehouse of up to 10 metres high and 3,000 sqm, with no sprinklers, it would cost $1,070 to $1,475 per sqm in Sydney, and $1,050 to $1,350 in Perth. In Melbourne, that would come in at a much lower $825 to $990, while south east Queensland would could show a slightly higher ceiling of $1,075. Adelaide is a shade lower.

Hotel construction

A multi-storey three-star hotel in Sydney, with a restaurant, public areas, and air conditioning, would cost $3,500 to $6,300 per sqm to construct, with price tag of $41,000 to $75,000 to fit out. While multi-storey five-star hotel with the same features would cost $5,400 to $7,600 per sqm to build, a fit-out would range from $70,000 up to $130,000 per sqm.

Download the N&B Construction Costs Datacards sector-by-sector and city-by-city for:

• Sydney;
• Melbourne;
• SEQ;
• Adelaide;
• and Perth.

Building product price inflation easing

 Over the June quarter, the cost of building materials lifted a further 0.6%, representing the smallest quarterly increase since the close of 2020. However, costs are still up 7.4% over the last 12 months.

According to CoreLogic’s Cordell Construction Cost Index, construction costs grew by 0.7% over the quarter, significantly under the decade average of 1.2%, and after the first quarter returned a growth rate of 0.9%. Annually, the Index was up by 8.4%, an improvement on the previous year’s 11.9%.

According to Turner & Townsend’s latest International Construction Market Survey, Sydney has overtaken Perth as the most expensive Australia city to build in, with average costs of US$2,950 per sqm compared to Perth’s US$2,633. Brisbane was third with US$2,561, pipping Melbourne with US$2,540, with Adelaide coming in fifth at US$2,382.

Construction inflation in Australia is expected to remain elevated in 2023 but lower than the previous two years, with average forecasts of 4%.

Published by the Australian Property Journal
23 August 2023

The Property Council of Australia recently reported potential for more than 150,000 new build-to-rent homes that could come to the market over the next ten years. Private, institutional and superannuation investors already have their eyes on the sector with many developments underway.

As part of the tax reforms, the Federal Government has announced an increase in the Division 43 Capital Works Deduction rate for BTR assets from 2.5% to 4% pa, where construction begins after 9 May 2023. The positive impact this change is expected to have on cash flow for investors of new BTR assets is significant, and it is essential that investors leverage off this benefit through the preparation of a Tax Depreciation Assessment as soon as the development is complete. Coupled with the allowances on plant and equipment under Division 40, the allowances available for long term owners of BTR properties will be substantial.

Further, as BTR assets have a long-term ownership profile, it is important that the design and quality of the built form are closely scrutinised during the design phase. Doing so will help to minimise both maintenance and capital costs over the life of the asset.

Napier & Blakeley has a strong focus on providing Cost, Risk, and Return solutions for our clients. With over 20 years of experience in the BTR sector, we have a range of services that will assist investors manage Cost and Risk while maximising Returns, particularly in BTR style developments with a long-term ownership profile.

To see some of our past projects and BTR related services, check out the video below and contact our team for advice:

The Regatta was hosted by the Royal Queensland Yacht Squadron which will also host sailing events for the 2032 Olympics, so we’re in good company.

The day consisted of little wind, beautiful weather, great food platters, a couple of sunburned faces, sock tans, and a championship trophy. Our boat, McMoggy, took first place within the multi-hull event and although this could be considered a technical win (other boats gave up and motored in due to the lack of wind) the N&B team persisted and a win is a win and, more importantly, we have the trophy to prove it!

Everyone had a great time and relationships were strengthened during the day out on the water. The team look forward to defending their title next year.

Congratulations to PIF, all other competitors, skippers, crew and supporters. Funds raised on the day will support The Haven Project as it builds homes for homeless youth across Brisbane.