RISKONET RESULTS
CBRE Investment Management 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 Investment Management, active in the acquisition and management of real estate, has further professionalised its acquisition process in recent years. Riskonet provides CBRE Investment Management’ insurance risk management department with ‘the big picture’ regarding their investment projects.
CBRE Investment Management (€ 28 billion in assets under management) operates in the EMEA area from 14 locations and has investments in 17 countries. The company 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. They themselves say about it: 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.
Investing in (fire) safety
Riskonet’s PARA, on the contrary, does give you this broad field of expertise. The assessment gives CBRE 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. Riskonet’s PARA assessment checks CBRE's compliance to laws and regulations as well as international standards such as NFPA. The report warns the company of issues that might come up after acquisition which might cause financial drawbacks in the long run.”
Mediocre fire safety
The Riskonet reports provide CBRE with additional information that they can use to their advantage. Observed poor quality of a security and fire safety system, and non-compliance might give them a better bargaining position when negotiating the purchase; the information gives CBRE an argument to subtract the necessary investment costs from the total price of the takeover. As such, PARA offers a return on investment.
An another added value is that Riskonet has access to a large network of specialists, international as well as national. If CBRE want to buy an asset in Italy or Spain, Riskonet is able to move rapidly. Riskonet ensures that the experts of CBRE promptly receive an assessment from an Italian or Spanish expert that meets the requirements and standards of CBRE Investment Management.
Higher premiums, lower returns
CBRE appreciates Riskonet’s keen eye, although the consequences are not always pleasant; not investing can lead to a higher insurance premium. Investing can lead to a lower return, and possibly even to a decision not to purchase. This also applies to the reviews that Riskonet does for the company of the plans for objects yet to be built. In both situations the following applies: Riskonet information protects against nasty surprises. The work of the Riskonet experts offers a strengthening of 'risk awareness' before the acquisition!
