Eighty20 Combined property solutions
Due Diligence
In mergers and acquisitions investigations into the target's property portfolio often follow behind the accounting and legal teams of advisers.
It is sometimes assumed that leasehold properties are of less significance than freeholds. However leases can contain hidden value, for example through potential for realizing marriage values arising from contributing to adjoining properties' access.
Also, liabilities might be hidden in lease terms which incorporate undischarged covenants such as hidden or understated repairing liabilities.
There are many examples of where surveys and lease analysis have been undertaken under intense deadline pressure, often requiring experts to travel the length and breadth of the country and report in as little as 48 hours. In most cases liabilities have been accurately assessed and off set against the conditionally agreed price for the target company.
One of the largest cases of this type involved a distribution client about to complete acquisition of a similar group at a nine digit figure. Pritchard's team uncovered liabilities equal to nearly ten percent of the company purchase price. The transaction completed with an appropriate reduction in purchase price.
Due Diligence
In Development
Some clients make contact following receipt of a developer's proposal. Examples include the development of facilities for:
1. Comparison of Opportunities
The client had received a proposal for the development of a bespoke head office and distribution facility in Dartford. Pritchard analysed the proposal, concluding that it would be financially and operationally beneficial for the client to acquire an unencumbered site close to the Q.E. II Bridge, the site having come into the ownership of a distressed foreign bank.
2. Proof of Ownership
The client had planned to move its head office and production facilities onto a site in Derbyshire, purported to be controlled by a developer. On undertaking a land registry search it was found that the developer had secured an option over land owned by British coal but the subject site was outside the optioned estate. This made it possible for the client to treat direct with the land owner, thus securing the site at a lower cost and benefiting from putting the construction contract out to competitive tender.
