Posted on Sep 01, 2019
Comparisons can sometimes throw up some interesting data.
It’s important that prospective tenants know what a building is going to cost them to occupy. We cannot predict what devious new ways the Council will find to increase rates in the future, but at least this year’s rates will give a reasonable indication, give or take a few percentage points, of what next years rates will be. And we believe it is important that tenants know they are going to have to pay for servicing of air conditioning, roller doors, gantries and the rest.
But the quoted figure for building insurance has the possibility of being inaccurate by a huge factor.
A recent comparison of two buildings from our portfolio demonstrated this. An 1100 m2 tidy, but “B” grade building is costing $5.00 m2 for replacement insurance. Yet a 20% smaller “C” grade building is costing nearly $13.00 m2 for replacement (and that’s replacing a “C” grade building with like for like) insurance.
That’s 250% more. And the reason? Simply the business type of the tenant paying more, is rated a higher risk. Which means that when we quote an approximate figure for insurance, that figure is very much tied to business type.