Property management involves a lot of risk, and at Auckland Property Management our focus is on risk reduction strategies for our owners. Part of this service includes monthly property investment seminars on topics of interest to our clients.
Article by: Estela Guidote, Business Development Manager – Commercial Property Management
Auckland Property Management’s first commercial property management seminar was a success, attendance and interaction with the attendees was high, and we had great outcomes during the Q & A. The main speaker for the evening, Sean Marshall of Prendos, was very informative and well received during this seminar.
As a prelude to Sean Marshall’s presentation, I provided an overview on APM’s Commercial Property Management division, we focus on reducing or removing the risks that come with property management and ownership. The main points I discussed are as follows:
- What sets APM apart from the rest?
The company has over 25 years of experience specialising in Commercial, Residential, Body Corporate and Holiday Accommodation Management (One-Stop-Shop); and with Howard Morley, APM’s Managing Director having more than 40 years of real estate industry experience both here and abroad, it is ensured that all divisions are knowledgeable, well-versed and well-equipped in property management in order to provide service par excellence in the market. “Customer First” is our motto, where customer experience sits as the core value-add to our business and helped lead us to where we are now – one of the leading property management companies in New Zealand. We aim to achieve the “Preferred” Commercial Property Manager status in the industry.
- What is the Commercial division’s reach?
Even though our name suggests we only manage commercial property in Auckland, It is essential to mention that APM Commercial’s client reach is far and wide from Auckland, Whāngārei, Hamilton, and Gisborne, down to Napier, Nelson, Queenstown and much more.
- What is Commercial property?
A commercial property is a complex from which one or more businesses operate from. They can be retail shops, shopping malls or centres, car park buildings, office buildings, motels, industrial sites, education properties, medical properties and much more.
- What is the role of a Commercial Property Manager?
Commercial Property Managers handles all the day to day issues that may arise with Tenants, as well as a number of specific services such as: Lease Management, Building Warrant of Fitness (BWOF), Maintenance, Operational and Capital Outgoings, etc. Other services are available in our website here.
- Some ‘need to know’ terminologies
Deed of Lease, Operating Expenses/Outgoings, BWOF, Building Compliance, Rent Collection, Rent Reviews, Renewals, Vacancies and Inspections.
Sean Marshall, Chairman, and a Chartered Building Surveyor of Prendos
Sean Marshall, Chairman, and a Chartered Building Surveyor of Prendos, presented on dealing with commercial property risk mitigation. After being in the business of commercial properties for 25 years now, Sean knows a thing or two about ensuring commercial property is compliant and running as smoothly as possible. Sean emphasised the following significant points:
- The Building Act is the primary piece of legislation governing new and existing buildings in New Zealand.
- Among the “specified systems” within the Building Code, Sean emphasised two most important systems that Owners should look into in depth – namely Fire separations and Smoke separations.
- Passive Fire unfortunately is not given enough attention in Auckland at all. Passive Fire Protection must be built into the structure to provide stability and into walls and floors to separate the building into areas of manageable risk – compartments. Sean mentioned that the Building consent, compliance process, and tests can be expensive and time-consuming however necessary. Building Warrant of Fitness (BWOF) should be renewed based on the schedule and should be up to date within the standards to be applied by the qualified BWOF service provider engaged by the Owner.
- Another important matter that Sean discussed was about Asbestos in line with the Health and Safety at Work (Asbestos) Regulations 2016. It is highly recommended for the Landlord/Owner to have an Asbestos Management Plan/Asbestos Survey Report done to ensure that the property is a safe workplace and will not cause any health problems with the workers or visitors within the property.
Useful resource: http://www.legislation.govt.nz/regulation/public/2016/0015/latest/DLM6729706.html
- An Auckland District Law Society (ADLS) lease is the most commonly used commercial lease form in NZ. Sean strongly advised that in order to avoid litigation disputes and arguments which can be lengthy and costly, to not leave anything ambiguous, thus every detail should be accurately recorded in terms on what both parties (the Landlord and the Tenant) are about to take on in the Deed of Lease. Sean advised to put everything in writing and have photographs of the property signed off by both parties concerned.
- Pre-Acquisition Technical Due Diligence is about informed decision making and clarifying the technical risks of commercial property. Investors should do their homework – what to do and what not to do. The aim of technical due diligence is to provide a thorough understanding of the condition of a property or development and to facilitate precise capital management. As a recap, the Statutory requirements are as follows:
- Asbestos risk
- Building code compliance
- Energy efficiency
- Fire compliance
So, while it might cost slightly more up front, it saves you money in the long run – giving you leverage to negotiate the lease or purchase price, or make an informed decision about whether to go ahead at all.
- Sean also highlighted the service offerings Prendos provide for Seismic Assessments aligned with the Building (Earthquake Prone Buildings Act) Amendment Act 2006 which applies to all commercial buildings and some residential types as well. Two types of Seismic are ISA (Initial Seismic Assessment) and DSA (Detailed Seismic Assessment) that would touch on the structural critical weakness.
Useful resources: https://www.aucklandcouncil.govt.nz/building-and-consents/Pages/earthquake-prone-buildings.aspx; https://www.nzsee.org.nz/db/PUBS/AISPBE/NZSEE_ISA_Guide_for_TAs_and_Owners_Ver2_Nov14.pdf
In summary, the point of the Commercial Property Management Seminar ‘How to Look After Commercial Buildings’ was for attendees to have an idea on how to look after buildings at all stages of investment – before investing in it, after purchasing it, and during its property management. If you have any questions about some of the topics discussed at the seminar, please contact me on [email protected]
As you may already know, APM will be holding a seminar each month this year on topics of current interest to current property owners and potential property investors. We will be posting further information about future monthly seminars via email, on our LinkedIn page, our Facebook page and our website seminar page. We look forward to seeing you at our next seminar!