RISKONET RESULTS
CBRE Global Investors EMEA
Before purchasing real estate, investors must have a good idea of where their money goes. Preferably the complete picture, including all risks and investments that must be made. CBRE Global Investors, active in the acquisition and management of real estate, has further professionalised its acquisition process in recent years. Riskonet provides CBRE Global Investors’ insurance risk management department with ‘the big picture’ regarding their investment projects.
CBRE Global Investors (€ 28 billion in assets under management) operates in the EMEA area from 14 locations and has investments in 17 countries. Jeroen van de Boogaard, Senior Insurance Risk manager at CBRE Global Investors, believes that a Riskonet’s ‘Pre-Acquisition Risk Assessment’ (PARA) is part and parcel of a broad due diligence process that accompanies the acquisition of real estate. “The image of us building an asset with financial, legal and fiscal know-how is incomplete without technical knowledge. Technical due diligence is often inadequate because it does not bring any expertise in fire safety solutions to the table.”
"Riskonet’s information safeguards us from unexpected surprises. Their work ensures risk awareness before acquisition!"
Jeroen van den Boogaard
Senior Insurance Riskmanager
Investing in (fire) safety
Riskonet’s PARA, on the contrary, does give you this broad field of expertise. “The assessment gives us an insight into the risks and the recommendations that will help reduce these. This might involve changing and improving safety procedures or investments that need to be made, such as the installation of a smoke detector, fire extinguishers or a sprinkler system.”
The added value is indisputable, according to Van den Boogaard. “Riskonet’s PARA assessment checks our compliance to laws and regulations as well as international standards such as NFPA. The report warns us of issues that might come up after acquisition which might cause financial drawbacks in the long run.”
Mediocre fire safety
“The Riskonet reports provide us with additional information that we can use to our advantage. Observed poor quality of a security and fire safety system, and non-compliance might give us a better bargaining position when negotiating the purchase; the information gives us an argument to subtract the necessary investment costs from the total price of the takeover. As such, PARA offers a return on investment.”
Jeroen van de Boogaard mentions another added value: “Riskonet has access to a large network of specialists, international as well as national. If we want to buy an asset in Italy or Spain, Riskonet is able to move rapidly. They ensure that we will promptly receive an assessment from an Italian or Spanish expert that meets the requirements and standards of CBRE Global Investors.”
Higher premiums, lower returns
Although Van den Boogaard appreciates Riskonet’s keen eye, the consequences are not always pleasant. “Deciding not to invest might lead to a higher insurance premium. Deciding to invest can lead to lower returns and even to the decision not to go ahead with a purchase. This is also true for the Pre-Construction Risk Assessment that Riskonet provides us with. In both situations Riskonet’s information safeguards us from unexpected surprises. Their work ensures risk awareness before acquisition!”
