White Associates Features in the Media

White Associates in the Media

This article was published in the Feb/March 2016 Issue of NZ Construction News

Seismic Strengthening – Think Outside the Square

A leading quantity surveying firm says that last year’s regulatory changes to seismic strengthening timeframes and high-risk regions mean building owners need to start looking at alternative design options for remedial works and consider the opportunities of alternative use.

Justin Maritz, a principal of property and construction cost consultants White Associates, says that in order to get better seismic outcomes, building owners need to ask the question: can I do this differently? “The rules have relaxed, but building owners shouldn’t,” he says.

After the government came under pressure to amend the rules around seismic strengthening due to concerns about costs and uncertainty from building owners, and apprehension from those using heritage buildings that they’d be abandoned or demolished because of the previous guidelines, regions have now been split into higher or lower risk zones. The changes will see the number of buildings that need to be assessed drop from around 500,000 to 30,000.

Mr Maritz says that despite the relaxation of timeframes and categorisation of risk areas, there are still a significant number of buildings that require assessment and potential remediation. “Even in this new regulatory environment, planning early and thinking about options and the alternatives available are important for a long-term solution.”

Explore your options

Mr Maritz says limited information is the biggest challenge owners face when evaluating their properties. “In the early stages, having little information means it can be difficult for clients to tell their quantity surveyor (QS) what to price. White Associates is quite unique in that when we are involved from the start of a project, we can work with high-level reports from designers to provide high-level cost advice at an early stage of the process, which is of tangible value to our clients and something of a rarity in this market.”

He says that often a feasibility analysis will result in a building being demolished rather than being remediated or retrospectively upgraded – and that’s not always a bad thing. “I would encourage building owners to look at alternatives and different solutions, rather than simply choosing the path of least resistance. We’ve worked with clients who have decided on a complete change in the use of their building, and others who have embraced the blank-slate opportunity created with a demolition and rebuild.”

Early stage involvement

Mr Maritz says that White Associates is an active participant in the seismic strengthening process.”We are heavily involved in assessing the feasibility of seismic projects, from the earliest stage. In that early stage of design and due diligence, we can provide high-level costing estimates which can often influence the direction of the project itself,” he explains.

“From our initial involvement, we’ll stay with the project until it’s in the post-contract stage, meaning we can assist clients with their costs and bank funding through all phases of the project.”

One of the most significant seismic challenges ahead for building owners is insurance. Mr Maritz says that buildings under 33% of the new building standard (NBS) could face restricted ability to get insurance cover, and in some extreme cases, buildings under code will not be able to get any cover at all.

“Buildings with an NBS rating between 33% and 67% are also facing increased costs of insurance premiums, which represents a sizable portion of the market,” he notes. “When considering your options about insurance, it is worthwhile to consider what steps you will take if your building can’t be covered at all.”

Mr Maritz says the varied structures, alternative design solutions, working environment and methodology identified at feasibility stage have high levels of assumptions that can result in high-cost fluctuations depending on the final design solution and methodology.

White Associates works with the design team at an early stage to try and identify the cost of the different design solutions, providing the client with choices.

Use your muscle

An active development pipeline across the country means that newer buildings with higher NBS ratings are putting pressure on older stock, Mr Maritz continues.

“Landlords are coming under increasing pressure to comply with NBS ratings. With more new stock coming onto the market and in the works, older buildings with lower ratings are feeling the pinch. Tenants are looking for more reassurance and confirmation of a building’s earthquake adequacy, which creates lucrative opportunities for the owners of newer builds and seismically strong older buildings,” he adds.

“We’re already seeing landlords command higher rental prices for good-quality, seismically strong buildings, and that trend will continue for the foreseeable future as we see the different strengthening timeframes come into effect.”

He says buildings with a good NBS rating can attract and retain tenants far better than those with lower ratings. “Of course, a good tenancy arrangement includes a number of variables, including cost, lease term and incentives, but seismic strength is becoming one of the most critical elements.”

Delivering good value

While some building owners will view seismic strengthening as a necessary (but expensive) evil, Mr Maritz says that when done well, assessments and subsequent solutions can, in fact, be an opportunity to create new value while reducing the cost of the works.

“Building owners looking at assessing their properties should consider project partners who can offer good value and design management because seismic strengthening may be costly,” Mr Maritz concludes. “However, it can also be an opportunity to improve your investment, reduce costs and future-proof it as well.”