News &amp; Blogs

John RoselNovember 6, 2018

If it Ain't Broke, Don't Fix it....

“If it ain’t broke, don’t fix it” is the comfort zone of the under-achiever, the sanctuary of the lazy bastard, and the standard for the arse coverer.

‘If it ain’t broke, don’t fix it’….is a metaphor for mediocrity.

Anything can be improved, but why do we try so hard to keep doing what we’ve always done, even though we want a different outcome? It’s because of fear, fear of the unknown, fear of what others will say.

It’s the fear that if I change what I am doing, I won’t know what will happen tomorrow, or I don’t know how my boss will react. Our survival instinct wants certainty, it wants plain sailing, with no troubles or worries. But the conundrum of this is that we are then dissatisfied with our lot, and we want more out of life than what we are getting. So our answer is to look for someone or something to blame, instead of changing the way we act and behave.

We are strange creatures, us humans……………

John Rosel

John RoselNovember 6, 2018

If...But...Maybe...Could've...Would've...Should've

The 6 deadly enemies of productivity and confident decision making.

I attended a training course back in the 90’s during my Real Estate days. It was a typical compulsory corporate training day with everyone wondering how they would make it through the day without falling asleep. But it was the first time I really took something from one of these courses, I had a ‘light-bulb’ moment so to speak. The Presenter put up a list of 6 words that would really start me thinking about the way I was working and living my life, and what I really wanted and why I wasn’t getting it.

If…But…Maybe…Could’ve…Would’ve…Should’ve...

These words provide the start to the stories we tell ourselves and convince ourselves as to why we are not achieving. They provide us with reasons to justify our lack of motivation, and they provide justification for why we are so hard done by.

Have a good hard think about these 6 words and how they are preventing you from achieving what you really want in your career.

John Rosel

John RoselNovember 6, 2018

Time Management for Living

Work/ Life Balance……sounds so easy when others say it, but it’s not about managing time, it’s about managing your why’s and your expectations.

The most prolific reason people use for not achieving what they want to in a day is….”I’m too busy”. This blog isn’t about telling you that you aren’t busy, rather it asks you to take a harder look at your situation. In this post GFC world we are all working twice as hard for half the money, but that doesn’t mean you can’t achieve a good level of work/life balance, in fact it’s more important than ever.

The traditional method of Time Management is to write down what you need to do then prioritise and take action. There is a key missing here and it’s the why? Why are you doing this task? It may well be Urgent, but is it Important? Defining Important comes down to your why? You need to understand your Core Values and what you want to achieve in life before you can even begin to discuss time management, otherwise you are only managing what other people expect of you, instead of managing your own life.

Expectation is the other key element. When we set our Core Values and goals we then constantly overestimate what we can achieve in 12 months and as such we get depressed and give up….however we fundamentally under estimate what can be achieved in 5 years, but we rarely see that because we give up.

Small, imperfect steps towards your goal every day, are far better than meticulously planned large goals.

John Rosel

John RoselNovember 6, 2018

Rising Interest Rates....is your Portfolio Ready?

Since the GFC we’ve had historical low interest rates which has been necessary to try and kick start the economy. But the big hidden risk is what happens when they rise? What does your property portfolio look like and is it robust enough to withstand the coming rate rises?

I started work in the mid 1980’s for ANZ Bank, at a time when interest rates reached 18% for home loans, 21% for commercial loans, and I was getting 13% on my passbook savings account! In a training session one day, we were shown a film from the 1950’s advertising savings rates at 5% and we all thought that was hilarious and it would never happen again. Well, here we are.

The big problem will come when interest rates begin to rise. It’s critical that your property portfolio is geared to withstand rate rises and that your cash flow from your assets can weather the coming storm.

If you’re geared well and you can rely on cash flow from your property assets to service your property debt, then you are well placed. The question is how risk adverse should you be? Should you allow for a 1% rise? Should it be a 5% rise? A lot of this comes down to individual assets. Are they well located? Do they have national tenants with good WALE? Are they non-repeatable? All these questions and many more determine how cautious you should be.

There are two major pitfalls to avoid –

1. With higher interest rates will come higher inflation and higher capital growth of your property assets. This will allow you to refinance and increase available funds to service debt. STOP…Don’t service increased interest costs via capital growth funding. Capital Growth funding is for new investment.

2. The cash flow utilised to service your property debt should be contained to that property or property portfolio. As soon as debt funding requirements exceed the ability of the property to service that debt, it’s time to rethink that asset…don’t hide that assets’ performance by funding it from better performing assets.

John Rosel

John RoselNovember 3, 2018

The Overregulation of Property Development

Property Development is the most overregulated industry in Australia and it is stifling creativity, affordability and jobs.

The finance industry is bemoaning its overregulation at the moment, but finance is just one part of the Property Development Industry. Just think for a minute the red tape and regulations of the following sectors, all of which are parts of the Property Development industry –

· Building Code of Australia

· Residential Tenancy Authority

· Real Estate Sales Act

· Strata Title Law

· Off the Plans Sales Contracts

· Disability Discrimination Act

· Town Planning Regulations

· Local Council processes

· Infrastructure Charges

· Electrical Authority Regulations

· Telecommunications Act and Authorities

· Green Star and Energy Efficiency Ratings

· Acoustic and Noise Requirements

· Traffic Engineering

· Fire Levies and Legislation

· Building Services Levies

· Construction Bank Accounts

· Valuation restrictions

· Financial Institution Limitations

· Taxation Law and Margin Scheme

· Retail Tenancies Act

…and these are just a sample. Now I’m not suggesting we go all Laissez-faire and reduce regulations and safety and consumer protection, but what I am saying is Property Development needs to be seen as a single industry where all these regulations can be addressed in a common environment. I believe this is needed to reduce red-tape and to improve the efficiency and job creating prospects of Australia’s biggest industry.

John Rosel

John RoselOctober 28, 2018

Tick....Tock....The Property Clock

The metaphor of the Property Clock is often used to generalise where property is at in the cycle of boom and bust.

I’m starting to think the batteries in my clock died at 6.30…

Property Development and Investment is such a different beast post-GFC compared to pre-GFC. Since the GFC of 2008, and since at least 2010 when property development really hit a wall, the total amount of investment in property has declined dramatically, but yields for well placed, new, national tenanted properties have tightened to record levels as investors’ have sought returns on their money greater than 1-2% cash rates.

In addition, the two-speed economy of the regions versus the capital cities has grown exponentially. Whilst Brisbane, Sydney and Melbourne have seen price and demand growth in residential (although corrections in this market are afoot), tumble weeds still blow through the regional development industry, and these winds are generated by the pandering of our politicians to the quick fix, the next election result, and a complete lack of political will to invest in regional Australia.

The property clock in the capital cities is lapping the regional clock. The capitals have had rises and falls in the last 10 years whilst the regional clocks remain stuck at the bottom.

That’s why we need base load power in the regions…so that my property clock can power up again.

John Rosel

John RoselOctober 19, 2018

Royal Commission Impacts

There is much debate in the industry about the impact the Royal Commission into Banking will have on the future availability of Credit and the types of funding structures available in the future.

There will be pain…but where?

There is no doubt that the Royal Commission will tighten the availability of credit….however banks are in the business of lending money so how will they reconcile that conundrum?

Firstly industries such as Property Development will go the way of most other industries, in that you get big or you get out. Unfortunately the small to medium developers will be hardest hit in terms of senior debt funding availability, on terms that they can work with. LVR’s will tighten dramatically which will mean more equity funding is required. This in turn will limit the amount of work those small to medium developers can undertake unless they can source third party equity or mezzanine style funding. Of course that funding comes at a price and a level of risk.

The major banks are also aware of this risk and whilst they may have a comfortable first mortgage position, another factor to come out of the Royal Commission is that banks will be loath to move in and liquidate small or medium enterprises for fear of the poor publicity.

So…What will happen, and in fact what we are already seeing, is the major banks tightening up on their lending criteria, but forming relationships with private equity funds and mezzanine lenders to provide the full funding package. These loan structures will be increasingly put together by brokers who sit outside the main banking system as the majors will not be seen to be structuring high risk debt.

Having said all that, overall Credit will become far more difficult to find for all, and the smaller your balance sheet the lower your chances of finding it. Small and medium sized property developers may well go the way of the old corner store….a nice memory of what used to be.

John Rosel

John RoselOctober 14, 2018

Change Management

Managing change in Property Development is a critical skill that all Development and Project Managers MUST embrace. It’s never easy, but with a few guidelines you can at least smooth off some of the sharp edges.

Communication

Remember communication for the project manager has two distinct paths –

1. Keeping the client informed of the project process and

2. Ensuring your project delivery team (consultants, builder and stakeholders are all moving in the same direction)

Firstly having a communication protocol in place from the start of the job is essential. Communicate at least once a week with your client, even if there isn’t much to say, your client will feel informed and at ease. No news is NOT good news.

Have a formal protocol of communication with and between consultants. Ensure everyone knows and adheres to that system. Don’t ignore any breaches to this protocol as this is how small design issues fester to large problems during construction.

Don’t hide risk issues from the client, keep them informed. Potential Risk issues should be a standard topic in your weekly report and let your client know not just what the current issues are, but also what are the pitfalls that you are on the lookout for. Clients really hate it when a problem strikes and it’s the first they know about it…they still aren’t happy when it hits but as I said, being proactive smooths off some of the sharp edges.

…and finally, don’t lay blame (at least not until you have resolved the issue). Look for solutions, not problems. Get the change dealt with and the project back on track. There is plenty of time to lay blame after the project is complete, if that’s what you want to do.

John Rosel

John RoselOctober 5, 2018

Managing Project Risk

Managing Project Risk is an oft utilised term by Project Managers that sounds very informed, but when pressed on what it means in practical terms, you more often than not come up against lovely motherhood statements and platitudes that make risk seem like some mysterious element that only the Project Manager knows about.

Managing Risk comes down to two clear and defined elements –

· Knowledge

· Proactiveness

Knowledge

In property development and investment terms, knowledge is simply having an understanding of the full project process. This deficiency is highlighted most often between the Project Manager who was “raised” at the front end of the property development process (Development Management), and the one who was “raised” at the construction end of the project (Project Management).

It is important to understand that both phases require different skills, both in expert knowledge and in personality type, and being able to manage different types of people. Problems arise when Development and/or Project Managers don’t accept that they may lack skills in certain areas of the whole development management process. They do this because they want to be seen as “experts”.

An arrogant man knows everything…a wise man knows he doesn’t.

Proactiveness

Knowledge and Proactiveness must work together. Without knowledge, or surrounding yourself with the people who have the knowledge, then you can’t be proactive because you simply don’t know what lies ahead.

Understand the property development process, understand what are the pitfalls and areas that can make or break a project, and put actions in place to either prevent the worst case from happening, minimise the downside risk, or be flexible enough in your management style to be able to change direction in the middle of a development.

As a Project Manager, being proactive is also about Change Management. To be proactive means needing to make changes during a projects’ lifecycle, which is good, but the great project managers are then able to communicate with and motivate the team, such that they are all moving in the same direction.

John Rosel

John RoselSeptember 29, 2018

Collaborative Deal Making

Prior to the GFC and especially through the 1980’s and 1990’s the success of a deal was measured by who won and who lost. People like Donald Trump made it into an art form, and wrote a book on how to win, and if you can’t win, make sure the other side lost.

Believe it or not there is such a thing as Win/Win deal making…

Starting work in the 1980’s and building my career through the 1990’s, that’s how I saw things for a long time. But I grew tired of that way of living, and eventually I realised I just didn’t want to live my life this way, seemingly in constant conflict. There had to be a better way.

As I grew in my business career, things began to change. Early on I knew I didn’t want to be in constant conflict but thought that’s how business was done. Then I decided to change and become Collaborative and guess what…things got worse!!

It took me quite a few years more experience to realise that situations got worse not because everyone was an arsehole, but that I thought just because I was being collaborative, everyone else should be too.

Collaborative deal making has a few critical rules –

1. Where you can, deal only with people you trust and people who bring solutions not problems to the table.

2. Take the time to understand what is important to the person you are dealing with. If you can find out what it is that “floats their boat” then you have the key to the deal. BE VERY AWARE that the other person will rarely tell you what they really want because it is often intangible. You will be surprised time and time again when you get to the heart of what someone really wants.

3. Accept that not everyone shares your Collaborative vision. There are people who would like to do a Win/Win deal but don’t know how to get there and there are others who are simply looking for any advantage they can get. Accept that you can’t change them. Be aware of the beast you are dealing with and keep your cards close to your chest.

Even with the toughest opponent you should be able to reach a deal that meets your minimum requirements. If not…then be prepared to walk away, life’s too short to deal with arseholes.

John Rosel

John RoselSeptember 22, 2018

The Cost of Poor Programming

Project programming often becomes a secondary thought for most developers and at best it is considered a construction issue not a development issue. This article focuses on Development programming not Construction programming. There are significant inherent risks in not producing development programming that identifies all the projects’ key milestones, all project risks, potential variations to timing, and key stakeholder requirements.

The obvious tangible element (and some people think this is the only element) of Time Slip, causing holding costs to increase, is rightfully an important element. But there are several other key elements that cause intangible problems that lead to project cost increase and poor long term outcomes.

Programming is intrinsically linked with Targeted Marketing. This is critical in longer term master planned projects that may move through various stages of the property cycle. Product in a Master Planned project may change throughout the life of the project, to reflect what the market is demanding. Poor programming or programming that does not take into account the changing property cycle, may end up providing misleading outcomes for the marketing team, and potentially the wrong product in the market at the wrong time.

Proper programing means setting up the project with all relevant links and pre or post required tasks. A program with incorrect Linkage is a recipe for disaster. This does not mean linkage is a ‘set and forget’. When changes to a project occur the impact on the program is seen through linkages, but this is where a good project manager works to adjust tasks, timing, and resource allocation to mitigate lost time in one area of the project by changing or improving another.

Stakeholder Management is one of the key elements of project management and the program is a tool for not only setting the stakeholders expectations, but also of managing those expectations as changes occur. Correct programming gives you the opportunity to show the impacts of an issue, but more importantly shows the stakeholder how those impacts can be mitigated through different approaches as the project progresses. This is the basis of pro-active project management.

Failure to make the program a ‘Living Document’ results in poor time control and poor stakeholder management. Too many people set a program at the inception of a job and it then goes in the bottom draw and a ‘management by reaction’ process takes over. The program must be updated weekly and must be a key tool in reporting to stakeholders and driving participants.

Finally, having said all this, you must apply the KISS principle (Keep It Simple Stupid). The program is important and must be a critical document, but make it a useable document. I have seen so many project managers spend countless hours in detailed programming, with the only subconscious outcome being to show the client how smart they are….but no one else can use the program...and the project manager has lost critical focus off the big picture and from driving the project forward.

Remember the keys to a successful project –

Plan your project…….Have a clear action plan...Don’t be afraid to change the plan

John Rosel

John RoselSeptember 15, 2018

Regional Economic Drivers

In a country where changing Prime Ministers is a reminder to do your annual smoke alarm check, the following is a newsletter I wrote in September 2015 with references to events from 2013……The more things change, the more they stay the same.

…September 2015

There's been a lot of talk in the last couple of years about the development of Northern Australia into the ‘Food bowl’ of Asia, and the North being an industry leader and a key economic pillar. But apart from white papers and plenty of talk not much has materialized. The problem as I see it is the development of Northern Australia requires a long term infrastructure mindset and does not fit the short term political mindset that permeates our system of government.

Decisions that provide short term political leverage are the ‘squeaky wheel’ of politics and get not just the oil but also the media’s attention, at the expense of innovative job creation. Decisions that require foresight and long term commitment for the good of our country as a whole, are incapable of being made by our political system as it now operates. Short term political points scoring, with complete disregard for solid long term economic plans, is the entire focus of both sides of politics.

We live in a rapidly changing world. For the last 120 years fossil fuel energy has been the base driver of most economies in the world. Like it or not, without oil and coal our economies would never have grown in the way they have. But the rapid change I refer to is the transition from fossil fuels to renewable energies. This change is now being driven by the most important element, consumer acceptance and demand. As our children grow up this demand for renewable energies will drive this transition at ever increasing rates. The change is already upon us and yet we as a country do not seem to have the foresight to be at the forefront of this change.

In Northern Australia we have vast land areas, good soil, and opportunity, but for us to take advantage of this momentum shift requires decisions be made now regarding water supply, power generation, and developing new and leading edge industries including renewable energies. These decisions require long term funding and infrastructure needs to be met.

There are only 2 things that will drive this change -

1. Political will (Non-existent as long as short term popularity and arse-covering remain the focus of political life)

2. Economic Advantage (Demand reaches a point where there is sufficient economic reward for private enterprise to take up the challenge of developing the much needed infrastructure)

What has happened with Adani in recent times is concerning, in that in creates an image that Australia is too hard to do business with and that is not what we need when option 2 above is the only way forward for our community and its future.

In the midst of writing this newsletter we now have our 5th Prime Minister in 5 years. As long as we continue to have minority governments and ‘independents’ holding the balance of power, these power struggles will continue as politicians scramble to hold onto their political careers by making knee jerk populist decisions.

Below is an interesting snapshot from one of my newsletters 2 years ago in August 2013 -

I attended the TEL breakfast this week where Andrew Robb spoke about the Coalitions 2030 Vision for Developing Northern Australia. Despite having little faith in what any politician says anymore, I have to say I was impressed with the presentation and the long term vision, which was not the usual short term populist spiel. The vision for agriculture, water resources, mining, access to Asia, key urban zones, and other economic infrastructure for Northern Australia seemed well thought out and was well presented.

Is it too much to hope that actions will follow words……..

Rant Over……...

John Rosel

John RoselSeptember 10, 2018

Property Asset Recovery

With hard times upon us, the days of set and forget assets are gone. Planning, investment strategy and research are vital ingredients in any property investment or development.

Unfortunately over the last few years some assets have been purchased with development potential or expected returns that have now all but disappeared. So what to do? Panic?

As with any investment medium the key is patience. Don’t act irrationally. Take your time, and take a long hard look at the asset. What was the original intention? Why has that failed? Has it really failed or does it need a change of strategy?

In past newsletters we have discussed asset investment strategy, management and diversity, but it is only now that some of those critical factors are coming to the fore.

Rosel Sherwood has over the years brought together significance experience, investment methodology and reporting techniques that cater to the assessment of asset fiscal management. This experience combined with the current economic conditions, has brought our Property Asset Performance service to the fore.

The Property Asset Performance service is not only about failed assets. The service looks to provide a proactive service that prevents the worst case scenario from occurring. It looks to investigate existing and under-performing assets on the following basis –

· Existing asset cash flow analysis

· Existing tenancy assessment

· Potential for improved returns through existing structure

· Future development potential

· Development Feasibility Analysis

· Due Diligence Reporting

· Finance and Cash Flow projections

· Program and Resource Management

Download a copy of our Property Asset Performance brochure from https://www.roselsherwood.com.au/services/

John Rosel

John RoselSeptember 2, 2018

Autonomous Cars and Property

I read an article today on Linked-In that suggested Autonomous Cars will be wide spread within 6 years. Maybe its 10-15 years, but there are certainly some major changes coming in the auto industry that will have big impacts for the Property Industry.

Some of the impacts on property will include –

New Commercial Office Developments – The requirement for car parking will be dramatically reduced and ultimately may not even be required in some commercial development. This will add lettable and useable floor area to new projects.

Existing Commercial Office Buildings - Existing car park levels can be converted into income producing lettable space. Of course this will depend on floor to floor heights and BCA compliance, but a huge opportunity for additional income will emerge.

Retail Shopping Centres – Currently retail shopping centres require large tracts of land area to accommodate car parking. With 50% site coverage being predominately car parking areas, the reduction of required cars will increase the viability of shopping centres by reducing required land area and increasing the ratio of lettable area to land area (plot ratios)

Residential Apartments – It won’t mean that individuals do not own self driving cars, but it will mean that car ownership will become a thing of prestige rather than a thing of necessity. As such, car ownership will become more and more the domain of the wealthy. This will greatly reduce the car parking requirements in the mid-range apartment market and as with shopping centres, will improve the Plot Ratio and hence viability of projects.

Residential Houses – As with apartments, car ownership will become more the domain of the wealthy and as a sign of success. Many first home buyers and investor homes will not have garages. This will allow for smaller land and house sizes which will help improve affordability.

Space Saving – In a standard car park that is relatively efficient, as a rule of thumb, each car requires 30m2 of land area once you include driveway space. In inefficient car parks and basements this can increase to 40m2 or more.

To give you an idea, in commercial terms 30m2 of lettable area in Brisbane CBD could be in the order of $500/m2 net rent if well located, and could yield in the order of 7% to 8%. That is a capital value per car of $187,500 to $214,000 that could be returned to the developer.

But the WORST thing about autonomous cars….our children or grandchildren won’t have to go through the torture of trying to teach their kids to drive.

John RoselAugust 27, 2018

Technology and the Impact on Future Jobs

Over the next 25 years, the way we work and the jobs we do will change more than they have over the last 2,000 years. Technology, automation and the coming world of Artificial Intelligence are already destroying jobs that have any form of repetitiveness, or low end cognitive requirements.

And if you thinks it’s just Blue Collar labour intensive jobs that will go and because you sit in an air-conditioned office you’ll be ok……you’re in for a rude awakening.

Autonomous cars and trucks are with us now, and over the next 25 years will become the norm…so no more taxi drivers. Mine Truck drivers are already sitting in Brisbane operating driverless trucks from 1,000km away.

An Australian engineer has invented and has put into practical construction use, a “robot” block layer that only requires the building plans to be loaded into its system and a supply of blocks to be delivered to site, and it will lay all the blockwork. No more block layers.

And it will have an enormous impact in the White Collar world, with work that can be systemised including accounting, and secretarial, even contract management.

When you research this topic and read commentary, there are clearly two types of people out there –

1. The Deniers – A machine will never replace a skilled tradesman.

2. The Doomsayers – When the machines take our jobs there will be no work, no income, and then the machines will take over

I think they are both living in a fantasy world. The deniers are simply sticking their heads in the sand, and they need to start looking at their jobs and the ways they can make small changes to ensure they have longevity. It’s not going to change overnight, you have time, but don’t procrastinate.

The Doomsayers just like doomsday fantasies.

All changes in technology in history are brought about by two things only –

1. War

2. Economic benefit

My opinion, is that all the changes we are seeing will be economically driven and they may not come as quickly as we think, because if all the jobs start to go then there is less personal income to move around the economy and that means less people to buy the products and services the machines are producing, which means lower profits for companies who own the machines, who will then look for ways to increase profits through employing more people so therefore producing people to buy their products…….

Simple supply and demand economics will prevail.

BUT…..there will be a level of generational pain as these changes become more rapid and there will be a portion of economy (workers) that will be burnt along the way.

Be ahead of the game.

John RoselAugust 19, 2018

Independent Project Auditor

Since the GFC the world of property development funding has changed. With increased prudential regulation and reduced risk profiles of the major financial institutions, there has been a significant increase in the Private Equity Funding space. This is coinciding with a core change to the way property development is delivered in this country. Joint Venture partnerships, diversified risk, and multiple funding sources are changing the nature of how property development is delivered.

With these changes has come the need for a higher level of expertise in the assessment of project risk, combined with the expertise to proactively monitor project delivery from inception to completion, and the ultimate aim of reducing delivery risk.

Rosel Sherwood utilises its 30 + years of experience in the property development and investment industry, to provide Independent Project Audit services to Principal Debt Funders, Private Equity providers, and Independent developers across the industry.

The core roles of the Independent Project Auditor include –

· Reviewing development proposals

· Reviewing and reporting on the accuracy of project feasibility studies

· Ensuring compliance with project conditions precedent

· Monitoring project progress against agreed milestones

· Site inspections and regular progress reporting

· Proactively identify and manage project risk

· Provide solutions and outcomes to reduce delivery risk and;

· Proactive communication with all stakeholders to provide risk mitigation

Rosel Sherwood brings its years of experience and knowledge of finance structuring, property development, development management, project management, and asset analysis experience, and have combined that with strategic partnerships, built up over many years with various experts and leaders in their fields, to provide a comprehensive Independent Project Audit service to its valued clients.

John RoselAugust 12, 2018

The Big 4 Banks

There are changes afoot with the way the Big 4 Banks treat lending and customer relations. The Royal Commission into banking practices is uncovering a level of disregard for the customer and circumstances that has forced many small to medium businesses to the wall in recent years. A recent comment I read summed it up…”The Banks will lend you an Umbrella when it’s sunny, then want it back when it’s raining.”

But is it all their fault?

I started my career in banking with one of the big 4 and I had a decade in the industry before moving out into the private property development sector. One of the greatest hurdles I faced was my mind set. In banking the approach you take is, how can this deal or project I am assessing go wrong and how do we mitigate that risk. That is compared to the private sector which is focused on how do I make this project work, identify the risks and come up with solutions.

In defence of the big 4 they are strictly controlled by APRA and the levels of exposure they can have to certain sectors under certain conditions, and that regulation is warranted. It is one of the reasons our banking system didn’t collapse during the GFC.

But more importantly the banks (like any major institutions) are controlled by shareholders, share price, and dividends. Again this is not a bad thing and shareholders are obviously critical to an organisations’ success and deserve to be rewarded. It however does produce a culture of maximisation of annualised returns and a complete focus on the bottom line, rather than a more collaborative approach with clients. The need to build strong relationships with customers seems to have gone by the wayside.

A partnership approach rather than an adversarial approach would, I believe, provide significantly better outcomes for financiers and borrowers, but that would mean a cultural shift from where we are now.

John RoselAugust 6, 2018

How well is your building? (Part 3)

In Part 3 (and final) of our Building Wellness Blogs we look at the Operational Phase of the property life cycle.

Part 3 – Operational Monitoring

This area is growing exponentially because of two reasons –

1. The concern for personal health (read productivity) of workers; and

2. The advancement in technology

Building Management Systems (BMS) already have the ability to monitor and change air-quality, control lighting lux levels and change levels of natural light penetration, and to maintain the heath of natural green spaces within buildings. But one of the great breakthroughs that is within 5-10 years away from commercial reality is the monitoring of an individual health during the working day. This might seem like Big Brother but it is a reality that has already passed the test phase and is being used in some major corporation’s offices around the world on a trial basis. It has the ability to monitor things like blood pressure, fatigue, and oxygen levels, and then to adjust the environment accordingly through the BMS. But the real big step in this system is the monitoring of personal health including blood pressure, heart health, cholesterol and other individual health issues. This is being done by linking the individual to the BMS system through various methods and providing a live read of an individual’s health at any one time.

This is not fanciful and is being trialled now and don’t misunderstand that in an increasingly competitive investment market, these type of BMS will become the norm.

Remember air-conditioning was once considered a luxury item…..

John RoselJuly 30, 2018

How well is your building? (Part 2)

In Part 2 of our Building Wellness Blogs we look at the construction process and the impact it has on overall personal and building wellness.

Part 2 – Construction Elements

Organisations such as the Green Building Council of Australia (GBCA) have made inroads in this area over the years but the extent of the impact generally remains at the institutional end of town. Whilst NABERS requirements have now been enforced by legislation for property over 2,000m2, how do we bring some of these concepts into the mainstream?

Firstly there is always an immediate perception that all these elements are cost prohibitive. Now I agree that a lot of them are when you don’t have economies of scale, however as with all things many of the elements will bring added value….if combined with a strong marketing campaign that highlights their benefits and outcomes in terms of operational savings and increased property value.

Some of the elements include –

· Construction materials –

o Sustainable Timbers and materials

o Concrete supply process

o Steel production process

o PVC Minimisation

o Volatile Organic Compound minimisation

· The production energy footprint of materials used

· Maximisation of landscape elements

· Hot Water Production Units

· Energy Production materials

· Energy Storage

· Façade Engineering to minimise mechanical ventilation

· Lighting types

Next week, Part 3 and final in this series - Operation Wellness.