In June 2017, TrustCapital Australia (TCA) engaged Napier & Blakeley to undertake Vendor’s Technical and Environmental Due Diligence relating to their commercial office portfolio.

Within two weeks of instruction we had reviewed all the available documentation, inspected all the properties and provided written feedback on our findings.

We were able to achieve this using our national team of building consultants, services engineers and cost consultants, in conjunction with external environmental consultants from our approved consultants panel.

This early stage reporting provided TCA, and their Facilities Managers, the opportunity to act upon minor items of deferred maintenance and short term future repairs and maintenance needs, to help prepare the properties for sale.

While the repairs were underway Napier & Blakeley completed the final  written reports.

Our reports covered the technical and environmental aspects of the property and risk assessment was facilitated by capital and maintenance forecasts over a ten year period.

Items in our forecasts are categorised by the detailed scope of the instruction along with a probability rating of the likelihood of such events occurring.

Due to the active management of the investment grade properties, our reporting was able to confirm low levels of future capital maintenance requirements, which were below benchmark levels for properties of a similar age and type.

The marketing campaign commenced in July and contracts were exchanged on all five properties (four purchasers) by September.

Being independent from both the sales process and property management provided further value in that Purchasers could take reliance on the reports, free from any conflicts of interest, as if the reports had always been prepared for themselves.

Reliance was extended to Purchasers on three out of the five properties.

Napier & Blakeley

With 32 years in the property, development and advisory business we have an intimate knowledge and understanding of costs and workings across the built environment.

This experience has allowed us to develop a unique data base of costs and condition based capital expenditure forecasts, for benchmarking purposes.

Napier & Blakeley pioneered technical due diligence services in Australia 25 years ago and remain as the market leader for these services today.

We were instrumental in the RICS Best Practice Guidance Note for Technical Due Diligence of Commercial and Industrial Property and also provide support to other industry bodies.

Our capability and resources align with our brand promise of providing commercially oriented advice in a timely manner and in a user friendly format.

Our technical due diligence reporting also provides a detailed working platform to transition into an asset management plan for new owners.

Year to date we’ve completed technical due diligence on properties totalling in excess of $15 billion of transactions covering commercial, retail, logistic, health and hotel property, for both vendors and purchasers who value complete independence.

For further information on our Transaction and Advisory services please contact our team here:

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 Simon Gould o.  02 8113 7112 m. 0409 228 552 e.  sgould@napierblakeley.com	BRISBANE Gavin Peach o.  07 3221 8255 m. 0412 225 781 e.  gpeach@napierblakeley.com

For 32 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

The event which involves a 135 metre abseil decent off the 33 storey 1 Market Street building was held in support of the Sir David Martin Foundation which raises funds to help young people in crisis. Simon was part of the Core Engineering team which has so far raised over $2,200 for the charity. Fortunately Simon was able to make it back down to the ground safely, although not without a few jittery moments when going over the edge!

Simon has also confirmed that the western façade of 1 Market Street is currently in good condition with no significant defects identified (sometimes it’s hard to switch off from your job!).

If you would like to find out more about the event or make a donation to the Sir David Martin Foundation, please follow the link below:

https://donate.grassrootz.com/sirdavidmartinf/abseil-for-youth-2017/core-project-consulting

Costs, Risks and Returns

Since the Lacrosse Apartment building fire in 2014 and the tragic Grenfell Tower fire of 2017, there are still more questions relating to the use of flammable ACP than answers.

Industry, governing bodies, financiers, building owners and occupiers, are yet to really understand their options.

• Will the import and use of flammable ACP in Australia be banned? – one of the suggestions made by the Senate’s interim enquiry report.
• Will the National Construction Code and Building Regulations be revised to require increased fire safety around the use of ACP? – as suggested by the current draft amendment out for public comment.
• Will the ‘grey area’ of whether the ACP is an attachment or part of an external wall be confirmed?
• Will Government required audits lead to large scale removal of flammable ACP and replacement with compliant materials?
• Will insurers carve out flammable ACP from insurance policies?  Will premiums increase?
• Is the reputation of ACP tarnished so much so that developers and architects turn their back on the material – as recently reported by Uniting Communities with their U City development in Adelaide?

These Grey Areas are Red Hot in the Property Sector

Aluminium cladding has been used for many years in Australia.  Panels can be solid or composite with a core material. Composite panels came into use in the 1990’s.

Those with a flammable 100% polyethylene core have become the subject of much discussion and scrutiny.

Composite panels with fire retardant cores were introduced in 1999 (such as Alpolic FR) and around 2012 (such as Alucabond Plus and A2).

Externally, the panels look much the same. Determining the product and type can be challenging and generally require a desk-top and an on-site audit.

Risk Management First Step… Audit what’s there

The aim the building audit is to ascertain the presence and extent of any flammable ACP, the risk it poses in terms of ignition and fire spread and the cost of available mitigation strategies. Reportedly, cladding replacement at Lacrosse is in the order of $1,000 / sqm of façade area.

The audit process typically includes a desk-top assessment of architectural drawings and specifications, cladding installation drawings, operation and maintenance manuals and warranties, together with interviews with installers and manufacturers.

The desk-top study often needs to be supported by on-site inspections and if required, physical samples can be taken and assessed for identification purposes.

Where flammable ACP is found, a quantitative risk assessment should be undertaken by a qualified Fire Engineer. The various fire spread paths can be ranked and mitigation strategies can be identified.

Cost estimates for recommended solutions can then be prepared by a quantity surveyor or a building consultant.

The building audit is the starting point of a risk management strategy and will help to navigate the changing landscape as answers are provided to the questions.

References:

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Non-conforming45th/Interim_report_cladding

AS 5113:2016 Fire Propagation Testing and Classification of External Walls of Buildings

https://www.abcb.gov.au/Consultation/Public-Comment-Draft

For further information on ACP and building audits please contact one of the team here:

NATIONAL Rob Howells o.  03 9915 6300 m. 0437 649 082 e.  rhowells@napierblakeley.com	MELBOURNE Micheal O’Gorman p.  03 9915 6330 m. 0488 285 221 e.  mogorman@napierblakeley.com
SYDNEY Simon Gould o.  02 8113 7112 m. 0409 228 552 e.  sgould@napierblakeley.com	BRISBANE Gavin Peach o.  07 3221 8255 m. 0412 225 781 e.  gpeach@napierblakeley.com

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

For 32 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

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 …

Property companies are turning to military like tactics to ensure property developments achieve the best possible performance at completion – and are mission ready for operations.

Whether property companies develop their own property or portfolios, procure by contracting or through  property acquisitions, they tell us of the challenges of navigating handover – through transition from construction to ‘taking ownership’ of the property – and the ongoing management requirements.

Beyond completion, anything that has been overlooked during design, construction and commissioning can result in unwelcome costs on ownership with the potential to depreciate value.

As an example, we recently provided an owner with an independent defects report relating to a newly developed commercial office property at Practical Completion. The cost estimates for rectifying the identified defects totaled $2.2M – a staggering 2.5% of the total reinstatement cost of the whole building.

As a result of working with clients, we have developed procedures to help smooth the way through the process and help safeguard operational and capital expenditure budgets.

The provision for Operational Readiness should flow right through the design, construct and procurement process and should include the following:

• Ensure that Operational Readiness has been considered in detail within the Principal’s Project Requirements, or other procurement documentation being used.
• Detail the requirements for commissioning the building and its services before Practical Completion and during the Defects Period.
• Schedule the requirements for, and durations of, materials and workmanship warranties.
• Define the defects identification, rectification and approval process leading up to Practical Completion and through the Defects Period. Ensure all key stakeholders, designers, certifiers and contractors are part of this process together with the head contractor and the owner or owners’ agents.
• Define the requirements, timing, content and the platform, operations and maintenance manuals should take.
• Define and program training for key stakeholders in the operations of the building and the building services.
• Program maintenance responsibilities of the various contractors through the Defects Period.
• Define the requirements of asset registers and equipment lists. Confidence in base data provided to maintenance contractors in tender documentation (outside of the Defects Period) eliminates the need for contractors to factor costs for unknown risk.
• Record the condition of the completed property at lease commencement to mitigate future potential disputes over alterations, repair and maintenance obligations and Make Good.
• Set realistic operational budgets and capital and maintenance expenditure forecasts.
• Program annual audits of the property including a review the Lessee’s obligations for repairs and maintenance.

Napier & Blakeley’s related services in the area of Operational Readiness include:

• Documentation reviews
• Maintenance Programming
• Independent Certification
• Superintendent services
• Technical Due Diligence and Development Monitoring
• Asset Registers and Depreciation Schedules
• Capex Forecasting
• Defects Reports
• Schedules of Condition
• Make Good Forecasting

For more information please contact one of the following experts :

MELBOURNE / NATIONAL
Rob Howells
National Director
o.  03 9915 6300
m. 0437 649 082
e.  rhowells@napierblakeley.com

SYDNEY
Simon Gould
Senior Associate
o.  02 9299 1899
m. 0409 228 552
e.  sgould@napierblakeley.com

BRISBANE
Gavin Peach
Associate Director
o.  07 3221 8255
m. 0412 225 781
e.  gpeach@napierblakeley.com

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

For 32 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

With a market leading brand, now in our 31st year of business, we have a unique reputation of gaining a deep understanding of our client’s business and industry so that project needs and outcomes can be strategically aligned to business plan objectives and to demonstrate return on investment.

Our project advisory services are provided by industry leading experts and from a multidisciplinary perspective extending beyond project advisors, development managers, building consultants, services engineers and energy efficiency specialists through to quantity surveyors who provide cost certainty and tax depreciation specialists who ensure projects benefit from a cash flow perspective.

Our Project Advisory services include:

• Project Due Diligence
• Project Monitoring
• Project Management
• Programme Management
• Superintendency
• Strategic Planning & Procurement
• Building Improvement & Refurbishment
• Property Re-Positioning and Change of Use

Below are some recent projects we’ve advised on:

99 Mount Street, North Sydney NSW
Client : Ho Group
Project Management of complete strip out and refurbishment of 9 levels of commercial office as part of an overall building improvement and repositioning program ($15m).

RACV City Club – 501 Burke Street, Melbourne VIC
Client : RACV
Project Management of the conversion of an office level into 24 room 6 star accommodation and the development of a new pavilion function room. ($13.6m).

Norman Hotel – 102 Ipswich Road, Woolloongabba QLD
Client : Tabet Investment Group
Project Management of the roof replacement and façade repairs for the heritage listed Hotel ($0.5m).

Valley Private Hospital – Police Road, Mulgrave VIC
Client : Australian Unity
Project Monitoring of Tenant led Stage 1 (2011 $18m), Stage 2 (2014 $13m) and current Stage 3 ($85m) hospital expansion works.

Townsville Private Hospital – 136 Wills Street, Townsville QLD
Client : Australian Unity
Project Monitoring of Tenant led conversion of a 4 storey office building to a 60 bed and support areas mental health hospital ($6m).

Corrimal Medical Centre – 48 Underwood Street, Corrimal NSW
Client : Australian Unity
Project Monitoring of Tenant led Greenfield development of medical centre ($10m).

Hurstville Private Hospital – 48 Underwood Street, Corrimal NSW
Client : Vital
Project due diligence providing an independent assessment of whether documented works met business case objectives and the identification of delivery risks.

Oxford & Peel Collingwood – Oxford Street, Collingwood VIC
Client : Small Giants
Superintendent for the 6 level 51 apartment complex ($12m).

High & Spring – 1271 High Street, Malvern VIC
Client : Moda Corp
Superintendent for the 6 level 26 apartment complex ($11.5m).

Summerhill Shopping Centre – 850 Plenty Road, Reservoir VIC
Client : LaSalle / Union Investment
Loading dock and waste management review.

DTF Owned Property Portfolio 5 Year Strategic Plan
Client : Department of Treasury & Finance
Preparation of a 5 year strategic capital expenditure plan to meet targeted business needs and annual budgets.

Highvale Manor – 42 Capital Avenue, Glen Waverley, VIC
Client : Lend Lease
Feasibility study for the BCA upgrade and classification change for conversion of independent living facility into aged care.

Call us today, if you would like any more information on Project Advisory 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

MELBOURNE
Richard McOmish
o.  03 9915 6332
m. 0409 478 460
e.  rmcomish@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

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

The event was very well supported with well over 85 yachts racing, with 7 of them also being entrants for the Rolex Sydney to Hobart race.

Beautiful weather and 15 knot winds provided a perfect backdrop for an excellent day of sailing as the 6th place overall is testament.

We raced on ‘Margaret Rintoul V’ which is 61 foot maxi cruising and racing yacht.  After dropping anchor for lunch at the idyllic Manly Cove, it was then practice time – under the professional guidance of our crew, before the start of the race.

The N&B crew comprised of:  

Peter Osborn – NB
Peter Guerra – NB
Billy Dawes – NB
Simon Gould – NB
Allison Ribas – NBE
Peter Thomas – ANZ
John Watkins – ANZ
Danny De Sousa – Brookfield Property Partners
Matt Dingwall – Invesco Real Estate
Michael Antonelli – Lend Lease
Scott Robertson – NAB
Dean Beaumont – NCIS Group

The after party on the beach was a great opportunity to connect with other corporate racers and plan how to get over the line 1st next year!.

Comments from our Guests:

“It was a great day and thank you so much to you, Allison and the NB Team.”  Dean Beaumont – NCIS Group

“I had a fantastic day and it was great to meet other members of your team, as well as other clients.  What a way to end the week!” John Watkins – ANZ

“Thanks for organising a great day out. The beach party was great too.” Danny De Sousa – Brookfield

“Thank you for organising such a great event!” Matt Dingwall – Invesco

“Thank you for a great day on Friday it was great to take some time out and also network with industry like people.” Peter Thomas – ANZ

“Was a really enjoyable day and to know we were in the top 10 was a good result.” Scott Robertson – NAB