The last four weeks since the extreme weather event on the 27th January has impacted the commercial sector tremendously. We have not seen the extent of damage that occurred to buildings and businesses before, and the fallout will be felt for many months to come. As Commercial Property Managers, we need to follow a thorough process in emergency and destructive situations at properties.

Initial Responses

The Auckland area has been hit with floods many times over the years but usually in smaller isolated areas. The volume recently was widespread and more destructive. When weather events are isolated resources can cope; this time they didn’t cope, and this makes it very difficult for Property Managers.

Our main priority was to ensure every tenant was safe and then make the initial contact with insurers so claims could be lodged as soon as possible. We were also able to contact first responders like the fire department, plumbers and drain layers. We have found that the next step of clean-up and reinstatement, which is usually straightforward, has this time been a very difficult process.

Assessing the Damage

Property Managers visited hard hit properties to check what needed to be done. There were many properties in the commercial apm portfolio that were damaged but thankfully the majority only suffered minor damage.

There were a few though that were impacted extremely badly. For these the clean-up has been difficult and the reinstatement process will be long and hard. One property in particular was an industrial park in Pukekohe. Unfortunately, the park is situated where three streams converge and the stream that flows past the building turned into a 50 metre wide, 1.5 metre deep river that swept through all five tenancies causing extreme damage.

Another warehouse in Onehunga filled with water which did not subside for over two weeks as the water table reduced. The fire brigade attended twice and a permanent pump was employed but the water from the ground returned as fast as the water was pumped out, so nature had to take its course.

The Insurance Process

After the initial contact insurance loss adjustors have taken over three weeks to respond and visit properties. Cleaners and flood restoration specialists like carpet cleaners are inundated and not available, the wait list for drain suction trucks is at least two weeks, and builders and similar resources are also in huge demand. This has left landlords and tenants to start the clean-up themselves and insurers are relying on them and Property Managers to take plenty of photos and keep all quotes and invoices, so the claims and pay outs can be handled as efficiently as possible.

The events over the last few weeks have highlighted the importance of having the right insurance. It is important to ensure polices are understood and that correct cover is in place, and to check if flooding and storm events are listed as natural disasters in the policy.

Extreme weather events could occur more frequently so insuring buildings adequately is going to become more important. Weather proofing and reviewing drainage is going to be a priority for many properties, especially as insurers will expect a proactive approach from property owners in regard to mitigating the risk of loss.

We are going to see the effects of the floods in January and Cyclone Gabrielle for many months if not years to come. Insurance premiums, building costs and resources and the economy will be impacted so owners of commercial properties need to ensure they protect the integrity of their buildings as much as possible and cover themselves with good insurance policies.