How to conduct technical due diligence for large projects

Technical due diligence is a process of analysing and reviewing a property/site by which the prospective occupier is able to acquire information and make an informed assessment of the transaction of the said property. A well-executed due diligence process provides investors and prospective occupiers with a strong position to negotiate on price and to mitigate any potential risk associated with the property.

The process of undertaking a technical due diligence varies with the purpose of the transaction i.e. acquisition, occupation, development or disposal. It can be as comprehensive or limited depending upon the client requirements. However, the following parameters should be should be included while conducting a due diligence of the property:

  • Assessment of the building structure, building services installations, vertical transportation, statutory compliances, ground contamination and hazardous materials
  • Review, obtain and collate all necessary and relevant building documentation and certification
  • Estimation of capital expenditure and time frame

Project management techniques should be used in due diligence to establish order and clear responsibilities at an organisational level. The following steps will help in conducting the technical due diligence for the property in a timely and coordinated manner:

  • Identify client requirements: Identifying the key requirements of the client is paramount and establish a work break down structure which will assist in developing a structured review framework.
  • Appointment of Subject Matter Experts (SMEs): Undertaking a technical due diligence particularly for a large property may involve a number of individual consultants, each covering their specific area of expertise.
  • Establish list of deliverables: The team to list questions that are required to be answered and helps in creating the deliverable list. The list needs to be in line with client requirements.
  • Develop a due diligence execution plan: Document the due diligence process, strategy for conducting the discovery process, and the work plan to collect the data, analyse and complete the entire effort. The plan is the roadmap to be followed throughout the exercise. The plan also should include the responsibilities of each member of the team.
  • Reporting to the client: Develop the reporting formats including weekly progress report and the final due diligence report. Also, develop and agree the document control procedures. Provide regular update to client through these reports.
  • Report compilation: Collect and collate the information from individual team members. Refine, revise, and update due diligence report and submit the final to the client.
  • Close out: Officially close out the due diligence exercise and handover all the documents.

Our technical due diligence experts have the requisite experience of verifying technical and physical aspects of the project that can help in safeguard your potential investment by identifying and mitigating risk. Contact our consultants to find out more about our technical due diligence services.

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