2010 - The Influence of the Natural World on Property

As we near the end of 2010, it is interesting to reflect on the events of the past 12 months and their impact on the demand for the services that IBC provides to our clients.

Much of our work has been associated with mother nature - the Christchurch quakes, weathertightness remediation, the effects of sunlight on fascia cladding, land slips and fire damage reports are some examples.

5 years ago, 90% of our building consultancy advice was provided to address issues in a reactive fashion for clients, with the remaining 10% being proactive advice to improve asset value. Now the percentages are 30% / 70%, with an ever increasing demand for advice on asset value and building / development performance improvement.

At the recent Property Council Conference in Christchurch, delegates heard how the next year or two will continue to be tough on developers looking to create workable projects with a reasonable return on investment. There is still concern over the world economic situation, with Ireland struggling for cash and other European nations heading the same way. The uncertainty will no doubt continue. Like mother nature, change is inevitable and adapting to that change is critical.

IBC help deal with change by providing advice that can prevent future problems, and that maintains and enhances asset value; as well as advice that reactively resolves building and property related issues. Next year, new legislation like the new Unit Titles Act will impact on the type of advice that clients are seeking as increased emphasis goes onto building lifecycle planning. The most profitable developments will be those that offer a client a 'whole of life' solution and long term maintenance strategy & sinking fund analysis, not those that go up based on a simple capital budget.

The team at IBC is growing and we are very grateful to our clients, old and new, for their continued support. We are delighted to have secured a partnership arrangement with SPM Assets in New Zealand to help us provide our clients with 'deeper' asset management advice. SPM Assets are market leaders in the asset management space and work throughout Australasia, South Africa and Europe.

It has been a tough and challenging year. We look forward to working with you next year and trust that you will enjoy a relaxing Christmas and New Year break.

No doubt mother nature will have more change in store for us during 2011!

Peter Harris and the IBC team

Image: hinnamsaisuy / FreeDigitalPhotos.net

Christchurch Building Condition Reviews

A number of clients have asked us to complete inspections of Christchurch properties as we have a team of experienced building surveyors available to assist as the need arises.

Structural engineers are best placed to advise on the structural integrity of affected buildings. Where their structural integrity has been confirmed as unaffected, IBC are well placed to advise on defects, defect remediation and other non structural related matters, including collateral damage as a result of roof leaks, plant / equipment damage and other building defects.

Please give us a call or email us if you or any of your colleagues need any help.

All the very best to all Cantabrians over the coming weeks as life starts to get back to normal.

Peter Harris
+64 21 607 184

It’s not just about leaks!

The building surveying profession in New Zealand is growing rapidly, largely on the back of the weathertightness issues affecting many of our homes and commercial buildings. Providing expert diagnosis of defects, and specifying and managing remedial work at these properties is just one facet of the specialist skills and expertise you should expect from a Chartered Building Surveyor.

Broadly speaking, you can expect to get value through using a Chartered Building Surveyor in a number of other ways. Of course, each individual will have different strengths and weaknesses, so the all important reference check is crucial when considering who to use to get the appropriate advice. With rapid growth in the profession, there are an awful lot of people out there presenting themselves as experts without the appropriate tools or training.

A Chartered Building Surveyor could:

• Advise you on your assets, their remaining useful lives and how much you need to set aside to keep them in good condition and maintain asset values
• Conduct technical due diligence on property purchases, advising on the risks and rewards of buying a particular building
• Provide technical due diligence on property developments that are being acquired – advising on options to mothball or complete half finished developments
• Prepare and drive development plans and feasibility studies for new property developments
• Act as your client representative on projects to oversee and manage delivery to meet time, cost, quality and relationship objectives
• Manage and specify project designs – with a particular bent for refurbishment and repair contracts
• Provide mediation advice on construction contract matters or disputes
• Manage and resolve matters relating to securing code compliance certificates on completed property developments

So whilst leaks are a hot topic throughout our fair land …. there is a lot more to Chartered Building Surveyors than meets the eye..

Going for Gold

As the markets continue to talk up gold and the fact that it may hit $2,000 sometime during 2010, property investors and owners in New Zealand continue to ponder decisions around making an investment in property, despite the alternative potential offered by that shiny metal. New property investment funds are beginning to surface around the place with value propositions to tempt would-be investors.

Enhancing the value of any investment, whether gold or property involves making decisions around risk. These decisions are based on experience, knowledge, information and often, intuition. We seek advice from other people regularly on matters that impact on our perception of the risks of a particular investment.

One of our core services involves providing clients with long term maintenance plans (LTMPs or reserve plans as we like to call them), that provide a basis for understanding the costs associated with maintaining an asset over it's lifetime and enable the creation of appropriate sinking funds. This is a popular service. There are a number of service providers in the market offering a range of advice and options.

Currently the building industry in NZ is dealing with significant shortcomings with it's design and construction processes - the weathertightness issue is touching us all. I worry whether, as an industry, we will learn from these mistakes and come out as better professionals. This concern was echoed last week when I learnt that some service providers are offering Body Corporates long term maintenance plans for a fraction of the cost of others. On a multi unit complex of over 100 apartments (with complex building services, a swimming pool etc), fee quotes ranged from $2,500 to $12,000. Every Body Corporate Committee has a fiduciary duty to the owners, and whilst the Body Corporate in question went through a weighted attribute analysis of the proposals, they are still highly likely to accept the lowest quote. Without getting into detail, and in my humble opinion, $2,500 just doesn't cut it, in terms of providing the right depth and quality of professional advice on a building of the complexity and size in question. In several years time, when reliance on that long term plan becomes important, the Body Corporate may find themselves with a problem..

We all acknowledge that price is important. Sometimes work is 'bought' to secure market position or to keep our people busy. That said, it is a rocky road - offering long term plans at such a low price creates an issue that, in years to come, may yet again question our ability as an industry to get our act together. People are beginning to rely on the LTMP when they purchase apartment units as an indicator on what they will personally have to contribute to the pot. It will not look good of the professions preparing those LTMP's get it wrong!

So, going back to the price of gold - isn't it about time we all started talking quality up? Isn't it about time we started going for the gold standard? It's an old well used phrase, but you do get what you pay for..