CASE STUDY: GLOBAL ASSET MANAGER

Introduction and Client Background

INform Surveying was instructed by a global asset manager to conduct reinstatement cost assessments on their industrial portfolio in the north of England. The purpose of this instruction was to provide accurate reinstatement valuations for insurance purposes.

Reassessments should typically occur every three years unless significant changes are made to an insured property, as building costs fluctuate, directly affecting insurance premiums.

Objectives of the Reinstatement Cost Assessment

The client had historical valuations for insurance cover, but these were outdated and undervalued due to fluctuations in construction costs over the past three years. INform Surveying was instructed to carry out new assessments rather than simply updating the existing values, as a desktop review would not provide the required level of accuracy. This ensured the client had accurate valuations, mitigating financial risks and ensuring the correct sums were insured.

Survey Methodology and Process

Inform Surveying conducted site inspections of all properties included within the instruction, gathering key data such as:

• Building and site areas
• Construction type and materials
• Special factors, such as neighbourly matters and deleterious materials

The inspections also provided an opportunity to identify tenant alterations or extensions, which could affect the rebuild valuation. Obtaining site-specific information is critical for delivering a detailed and reliable reinstatement cost assessment.

After our inspections, it became clear that the current reinstatement cost values were insufficient. Several alterations had been made to the properties, resulting in an increased rebuild value. However, not all alterations affect Landlord insurance, requiring thorough lease reviews to establish responsibility.

As our valuations were higher than the existing insurance cover, the client’s tenants faced increased insurance premiums. This often creates potential conflicts, as service charges need adjustment. The detailed and precise reinstatement cost assessments produced by INform Surveying provided clear justification for the increase, relieving pressure on the client and eliminating potential disputes.

The client was very satisfied with INform Surveying’s service and subsequently instructed us to carry out additional reinstatement cost assessments on their other property portfolios. The Landlord now has peace of mind, knowing that their properties are accurately valued and fully insured.