This article is from the Australian Property Journal archive
THE Royal Institution of Chartered Surveyors is set to launch a development monitoring services in Australia and New Zealand.
To be launched next month, the RICS Development Monitoring Guidance Note is the first industry standard of its kind. The document was developed by John Preece FRICS at DTZ’s specialist project management and building consultancy division, on behalf of RICS.
Preece said until now, there has been no real guidance for practitioners or investors on what constitutes good practice in development monitoring and RICS has addressed this void by developing a new, best-practice industry standard.
“The new guidance note addresses many of the risk-related issues which have become a lasting legacy in the development sector following the global financial downturn.
“The global financial crisis exposed a number of issues in Australia’s development sector and the application of risk mitigation services intended to protect investors, developers and tenants. While the sector is recovering and some banks are beginning to finance new projects, the commercial property landscape in which we now operate is vastly different.
“The banks remain extremely cautious about who they lend money to and the type of developments they will support, and with this caution comes a need for greater due diligence in the finance process and the ongoing monitoring of the development projects being financed,” he added.
Preece said development monitoring was a holistic approach to assessing the feasibility of a project, assisting in the negotiation of legal agreements, and then monitoring the development through to completion.
“All too often, development monitoring is considered as a simple monthly check on the project costs prior to finance drawdown, but there is far more to the process than this when undertaken properly.
“This includes technical feasibility studies, programming assessments, contract reviews, negotiation of the relevant funding/development agreement or agreement to lease and an overall risk audit, even before the works get to site. Once on site, regular audits of programme, quality of works, as well as project costs and drawdown payments are essential,” he continued.
Preece said the document will also be a welcome source of information for financiers, investors and tenants on the level of service they should rightly expect from the professionals they engage to provide development monitoring services, as well as a checklist scope of services for use in engaging consultants.
RICS’ Oceania managing director Kaye Herald said the tightening of liquidity and finance is increasing, especially in markets that had toxic exposures during the global downturn.
“What this means is that those looking to invest in the Oceania region will be looking for the security of their investments; similarly large scale lessees will want to ensure that their investments are enhanced.
“The Development Monitoring Guide will provide the platform for investors to come to market again with confidence. By providing them with a solid set of benchmarks, they can be sure that their funds and their interests are being met.
“For those seeking to acquire funds, the Guide will give them a unilateral language to speak and will also help them acquire the liquidity for projects,” Herald said.
Australian Property Journal
