Assessment of all risks and opportunities
The integration of the three key areas of due diligence – technical, legal and financial – allows us to show the current state of properties and property portfolios in both a comprehensive and differentiated manner.
The opportunities and risks of investment projects can be presented precisely and the returns in subsequent periods can be assessed reliably.
This makes due diligence essential both for the management of your own property portfolio as well as before an investment or IPO. Furthermore, it allows you to assess whether a property is actually a good fit for the current property portfolio.
We also help you to set up a data room for the preparatory phase of the selling process. So that you do not experience any unpleasant surprises that might have a negative impact on the return you are trying to achieve, we are also happy to help you in the analysis of the property for sale with a vendor due diligence check.
Technical Due Diligence
In the area of technical due diligence we examine and analyse the key technical aspects of the investment property concerned, in particular regarding maintenance and repair measures and any effects of building contaminants. First of all a review of the current and desired condition of the property is conducted by our own construction engineers and architects. Then our in-house economists and business experts conduct the financial analysis and assess the results and their impact on the property’s forecasted return.
We calculate the costs of necessary maintenance and repair work (CAPEX) and arrange the investments required for this in their likely order of occurrence. We also evaluate further potential opportunities to exploit existing planning and building rights as well as value-adding refurbishments and conversions.
Technical review of the current condition of the property
- Support the environmental due diligence regarding contamination and any pollutants
- Calculate the costs of maintenance and repair work and any necessary CAPEX costs
- Calculate the cost of modernising vacant property or for re-letting
- Evaluation of further potential opportunities to exploit existing planning and building rights as well as value-adding refurbishments and conversions
Legal Due Diligence
Legal due diligence represents the foundations of the due diligence process in the form of the identification of risks.
We review and analyse the legal and contract situation of the investment property concerned and examine carefully all of the relevant facts, records, lease agreements, construction contracts, usage agreements and any other agreements. However, due to the professional code of conduct we are not allowed to provide any legal or tax advice.
We show you the economic and financial consequences of the legal results and any action that is required for a planned transaction.
- Lease agreements
- Land register and development situation
Contamination and listed-property records
Public-law agreements and preservation and restoration statutes
- Planning and usage permission
Financial Due Diligence
In the area of financial due diligence we examine and analyse the financial situation of the investment property concerned. We examine all of the major factors affecting the financial opportunities and the risks that they entail. Based on data for the last few years, we prepare valid forecasts for the next few years taking into account current market developments.
We know the current benchmarks for target values and similar properties and can therefore assess very well what rents are competitive. We examine the proposed project using a range of internationally recognised valuation methods together with an internal rating system, analyse the development potential and prepare concepts and strategies tailored to the investor.
- Macro and micro analysis of the location
- Detailed tenant and property overview
- Rent roll analysis (target v actual analysis) and simultaneous property plausibility checks
- Cash flow simulation with various variants
- Concepts for use and optimisation
Digital and physical reports
You will be presented with a integrated summary of the results of the due diligence checks for all three disciplines (technical, legal, financial) in a linked digital and in a physical report with detailed text and figures.
The key results are presented first in an executive report and summarised in a separate red flag list. The key parameters for the investment decision are illustrated and presented clearly in charts.
We also prepare to-do lists for you for the tax or legal advisers assisting you in the purchase or sale. These lists are broken down into the periods for which the individual actions are relevant (pre/post closing, pre/post signing). Upon request we will also generate from our portfolio analysis (e.g. rent roll or deposit list) the documentation required as appendices for your sales contract.
- Integrated reports (digital + physical) and carefully prepared data rooms
- Additional Executive Report with the key results
- Separate red flag list of the biggest risk factors
- To do lists broken down by periods for which the individual actions are relevant
- Appendices for sales contract documentation (optional)