Due Diligence on Corporate Real Estates Transactions

Anthony Walsh
When it comes to corporate relocation, ever felt your realtor is just trying to close the deal? Our Hong Kong team offers a different approach, helping our clients make informed decisions.

Corporate real estate portfolios are fraught with difficult decision-making, as companies seek ways of achieving best value facilities while maintaining corporate reputation, functionality and staff satisfaction.

Here in the Asia Pacific region, the commercial office market remains in a strong position, with investment from China and US bolstering rentals and purchases. Companies looking to make changes in their real estate may do so as a result of mergers, acquisitions, consolidations, lease expiries, upgrading/downgrading, cost-cutting or other changing needs. It's a time-consuming and often costly process, but without expert support and guidance, it's all too easy to make costly mistakes.

Here in the Asia Pacific region, the commercial office market remains in a strong position, with investment from China and US bolstering rentals and purchases.

A strategic plan is needed, to give the best chance of navigating the complex web of potential options. This is so much more than identifying a couple of buildings and asking the client which they prefer. Faithful+Gould's corporate real estate service is based on due diligence principles, providing a comprehensive appraisal of the options, establishing the risks and benefits, and evaluating the commercial potential in the light of corporate aims and ideals.

We support clients in identifying their precise needs, and we help them explore their options. They may want to consider leasing versus purchasing, relocation to a different area, or the potential for retaining Grade 'A' space as corporate offices and moving back office functions to lower grade premises. We evaluate the options, providing accurate technical and cost-based information.

Having narrowed the field successfully, we then conduct a robust, detailed and nuanced technical review of the proposed buildings (there may be several, possibly in different locations). Our research typically includes:

  • location implications and future prospects – ambiance, neighbouring buildings
  • building structural elements
  • capital and operating costs
  • life-cycle costs
  • MEP provision
  • IT provision, including server room/plant room requirements
  • alterations needed to meet corporate requirements, including future-proofing
  • equipment implications
  • environmental sustainability of the building
  • staff implications – transport, the desirability of location
  • building's compliance with regulations (building code, fire, health & safety)
  • lease documentation
  • landlord reputation

Clients who have commissioned our service have reported a number of benefits:

  • enable identification of their precise requirements
  • provide a test bed for different options
  • tailored to individual business needs
  • support to explore locations
  • support to identify suitable buildings, via our network of contacts
  • full cost breakdown – capital cost, operating costs, life cycle cost, asset management costs, reinstatement costs on vacating/disposal
  • guidance on statutory local building regulations
  • ensure the building is fit for purpose
  • check on original building plans, and ensure no unauthorised building works

Our team of multidisciplinary experts, many from technical engineering backgrounds, know what’s required to make a building work, and how to identify whether a building is fit for purpose. Our cost managers draw on our accurate in-house cost benchmarking information to ensure there are no hidden costs. Above all, we’re on the client’s side – our role is not to close a deal, but to open up a range of real possibilities, backed up with expert information, to help clients optimise their assets and safeguard their investments.