How a commercial building survey could save or make you a fortune

Gone are the days where a building survey just highlights the building’s condition and its construction methods, or, provides a regurgitated CIBSE guidance note stating the life expectancy of elements or plant.

The true value of a full building survey shouldn’t be underestimated. It could save you from making a costly mistake or it could add significant value to your investment.

Quite often, all the buyer wants to know is - is my building going to fall down? Most chartered building surveyors can answer that in minutes of seeing a building.

But the real advantage of appointing a property professional to undertake a building survey is to benefit from their experience - not just on a building structure - but more commercial advice on market trends, added value, leases, property management and asset management opportunities.

We often utilise the expertise of our colleagues in other teams such as valuation, agency, landlord & tenant and management in order to present a well-rounded view and considered advice on a property.

A few things you should always consider:

What is happening in the market and what are the current trends?

Experienced building surveyors often hold valuable expertise on what occupiers and purchasers are looking for and therefore they can advise you on how to stay on top of the market.  

In order to maximise your investment, you should look to your building surveyor to advise you on conversion and refurbishment costs, design trends and the likely end values as part of any due diligence or report.

How will an existing lease or leases affect my investment?

A key competency of any building surveyor is dilapidations, and therefore your building survey should always include a summary of the existing leases in place and advise on the landlord’s and tenant’s responsibilities. This is key in considering the level of risk in a proposed purchase and identifying any potential and future capital expenditure.

A building may be in poor condition but with a good lease in place, to a good covenant, this may not matter. 

Other common mistakes include an investment where there is a large blue chip company with a long FRI lease that is effectively ineffective due to a schedule of condition. On the other hand, we often see purchasers become uneasy about leases where a schedule of condition is in place when, in fact, the schedule would not be as detrimental to their position at dilapidations stage as it would first seem.

Before assuming or hesitating on a transaction, seek relevant expert advice.

What if my building is in desperate need of refurbishment or repair?

It is very easy for a surveyor to pick faults in any building, old or new, and we often review damning reports of properties or portfolios where a surveyor has highlighted potential risks and the associated costs. 

A good surveyor will always provide a commercially minded view of the impact of any issues and provide options or solutions, whether this is through good property management or a planned maintenance programme.

A credible surveyor will always go one step further by highlighting opportunities with utilising service charges; undertaking less costly short-term repairs; providing advice on prioritising items in order to help spread costs throughout the property lifecycle; or ensuring high risk items are dealt with correctly.

Where and how can I add value?

A building surveyor can, and should, highlight or advise on opportunities for further capital expenditure or asset management opportunities to add value.

Building surveyors do this by using the knowledge and experience they’ve gained from working on refurbishment projects. Such expertise means a surveyor understands how expenditure can be put to best use, to create maximum value.

These are just a few examples of good, commercially-mindful qualities that anybody dealing in property should be looking for in a building survey or as part of their normal due diligence. 

A building survey should be seen as an opportunity to look into options rather than just a milestone or tick box exercise. 

Puneet Vedhera works in the Building Consultancy and Project Management team at Knight Frank in Newcastle. He can be contacted at puneet.vedhera@knightfrank.com 0191 221 2211.

About the Author:

Puneet Vedhera is Chartered Building Surveyor and Associate in Knight Frank Newcastle’s Project & Building Consultancy Team. He advises a wide range of clients including international investors, UK funds, property companies as well as private individuals on commercial and residential property.

He specialises in Project Management, Dilapidations and technical due diligence matters on buildings across all sectors.

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