Posted on Sep 01, 2021
Being thrown into lockdown once again has again brought to the fore the topic of working from home, and the associated efficiencies or inefficiencies. Whilst we are intermittently irritated by the stream of articles in the press intimating that everyone is working from home, and conveniently ignoring those who are essential workers and have to be on site, and those whose work just cannot be done from home. A fencer, a nurse and a diesel mechanic just cannot work from home.
But more importantly, perhaps this is an opportune time to give consideration to just how much agents could do to enable tenants and investors and owner-occupiers to make decisions about premises without the need to personally be on site. Too often agents are too quick to attempt to get clients on site. Whilst we recognise the reasons for that, we also recognise how inefficient a use of time and resources it is. Most other vendors of investment assets have moved past physical inspection being the first part of the sales process. I don’t really need to inspect a share certificate (if such a thing still exists) or a gold bar. And with crypto currencies a physical asset doesn’t even exist.
So surely the first stage of the process would be better served by providing accurate and succinct and relevant information on the asset.
A recent IM supplied to us, and this is reasonably representative, was 16 pages long. Page 1 was the cover with a pretty picture. Page 2 was an extremely fluffy introduction, together with another pretty picture, and the relevant agents’ details. Page 3 was contents. Page 4 was actually somewhat relevant. Another 2 pretty pictures, together with title information, zoning, floor area etc. Page 5 tells me the property is in Auckland, and has a map of the upper half of the North Island pointing out where Auckland is. Page 6 tells me the property is in East Tamaki, with another map showing where in Auckland East Tamaki is. Page 7 gives a flowery description of the property. Page 8 gives more property particulars. Page 9 is another pretty picture plus rating and council valuation information. Page 10 tells us what activities the council will allow to be done in the zoning the property sits within. Page 11 gives the tenancy schedule. Page 12 tells us the sales process and what further information is available if we request it. The balance of the pages are devoted to the title.
Nowhere does this IM give us any indication of how much money will need to be spent to bring the building up to an acceptable Expedio standard.
We far prefer the agent who tells it as it is. The carpet is past it’s best. One of the three aircon units needs replacing. The car park lines need re-painting and so do all the offices. But the roof was replaced 8 years ago and the skylights 4 years ago. That type and depth of information is far preferable to it being explained where East Tamaki is. Gilding lilies seldom works with investors in these types of assets.
Perhaps we can learn from being locked down that there are many things we can do without actually having to be on site. And buying and selling industrial buildings is one of those things. But only if we are given adequate information by agents whose guidance we trust. It has been done – and Expedio will do it more often in the future.