INSURANCE ASSESSMENT. of a RESIDENTIAL / COMMERCIAL DEVELOPMENT WARRINGAH COUNCIL AREA

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1 27 May 2010 INSURANCE ASSESSMENT of a RESIDENTIAL / COMMERCIAL DEVELOPMENT in WARRINGAH COUNCIL AREA PROPERTY Pittwater Road Narrabeen NSW 2101 ORDERED BY Strata Manager Strata Development Services 7 Delecta Avenue Clareville Beach NSW 2107 FOR Owners of PURPOSE OF ASSESSMENT To assess the current new replacement cost of the improvements to comply with the Strata Schemes Management Act 1996 PO Box 3418 Telephone (02)

2 1.INSTRUCTIONS We acknowledge your instructions to assess the current new replacement cost of the improvements for insurance purposes. 2.IMPROVEMENTS Five level residential/commercial building with security entry and lift access. Construction is concrete/masonry with part rendered/sandstone/metal-timber clad façade, concrete floors, aluminium framed windows and metal roof. Accommodation comprises 10 x residential units and 5 x commercial units with basement garages, car parking and loading dock. Assessment includes all external works adjacent to the building and within the site boundaries. Prime cost items are good standard and include air conditioning. Strata Plan registered in BASIS OF ASSESSMENT The assessment is calculated on the replacement value of all existing improvements in an as new condition, that is the cost of replacing the improvements to a standard no worse or less extensive than when they were built new. 4.METHOD OF ASSESSMENT As prescribed under Part 3, Clause 12 of the Strata Schemes Management Regulation 2005 the manner of calculating an amount to which the liability of an insurer may be limited under damage policy is to add together the following amounts: (a) total cost for rebuilding or replacement of the building and improvements (b) removal of debris (c) architects and other professional fees (d) an amount by which the expenditure referred to above may increase over an 18 month period following the commencement of the Damage Policy (e) the amounts referred to in (a) and (d) above are to include any applicable taxes, fees and charges. PO Box Telephone (02)

3 5.DISCLAIMER We believe the 18 month cost escalation period stated in the Strata Schemes Management Act 1996 is below a realistic escalation assessment if there was a total destruction at the end of the policy period that is 12 months. Assuming a loss on the last day of the policy (in 12 months time), then allowing for a potential 6-9 month demolition/removal period and thereafter a 12 month rebuilding period, a more realistic cost escalation period would be 30 months. Our assessment has therefore been made on the basis of allowing an escalation on costs for a minimum period of 30 months. This assessment is based on the assumption that if there was a total loss requiring rebuilding, that the commencement of building work would not be delayed by Council approvals. This report has been prepared for insurance purposes and does not take into account Council requirements as regards site density, building setbacks or zoning. The assessment is on the basis that the improvements will have the same functional use and usable areas of the old buildings and be rebuilt in conformity with all Council building codes in force at the date of the assessment. Owners of the Strata Plan should be aware this assessment makes no allowance for loss of rent/temporary accommodation in the event of a loss. Policies vary on whether this contingency is part of the sum insured or in addition to the sum insured. Assessment makes due allowance for total destruction as a localised event and does not allow for increased construction costs frequently associated with a regional disaster. Various Companies offer Catastrophe Insurance as a policy extension. We have not conducted an environmental audit and this assessment makes no allowance for site contamination. Insurance estimate for the retail/commercial units are based on a lettable standard and no allowance has been made for any special fitout. This assessment includes an allowance for GST. PO Box Telephone (02)

4 6.ASSESSMENT WE ARE OF THE OPINION THE CURRENT NEW REPLACEMENT COST OF THE IMPROVEMENTS AT PITTWATER ROAD NARRABEEN AS AT 27 MAY 2010 IS: $6,980,000 (SIX MILLION NINE HUNDRED AND EIGHTY THOUSAND DOLLARS) C A McPherson Registered Valuer No 6753 PO Box Telephone (02)

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