The government will give you up to 35 years

If a Seismic Assessment (ISA or DSA) of your building concludes with an NBS rating of less than 34% then that’s an asset that is classed as an Earthquake Prone Building (EPB). Once notified the council, who is delegated to do the administration for the government, will give you notice and advise a date that you will need to have the building upgraded to a satisfactory standard.

Will tenant(s) accept doing business in a building that is deemed a potential health & safety risk? Maybe, but not the premium tenants. Not likely the tenants with brands that drive foot traffic. Not likely the tenants that lift the profile of the asset. Not likely the tenants that pay a premium rent to be in premium locations. What does reduced occupancy look like for the P&L?

Will the financier accept that the asset is impaired? What is the value of the building? What is the debt ratio? What’s the impact on the interest rate?

Will the insurer accept that the asset is Earthquake prone? Not just the buildings insurer but the tenants’ insurers to. Will Business Continuity Insurance be available to businesses in an EPB?

If the Seismic Assessment concludes with a rating of between 34% and 67% then the building is classified as an Earthquake Risk. This is not deemed by the government to require remediation. But will tenants be that generous? Many high-profile companies have vacated buildings with ratings below 67%

Often, tenants require a minimum standard for occupying a building. The same financial stakeholders may have similar issues with an assessment below 67%.

So, is the deadline for seismic strengthening action 35, 25 or 15 years or are there real commercial forces in movement that drive a requirement for action much sooner?