HOW WE CAN HELP

From acquisition, portfolio condition assessment and disposal, TFT have the knowledge, understanding and practical experience. Some case studies are outlined.

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THE ROLE OF TECHNICAL DUE DILIGENCE (TDD)

TDD: much more than just a new name for a building survey providing insight and information to identify risk and enable key decisions to be taken.

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OUR APPROACH

Working on behalf of leading institutions and businesses in UK and Europe to deliver best practice from the widest viewpoint with thorough, integrated reporting tailored to individual needs.

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SECTIONS

SPARING NO EFFORT, STOPPING AT NOTHING, PULLING OUT ALL THE STOPS. WHATEVER YOU’D LIKE TO CALL IT, OUR APPROACH ENSURES THAT NO STONE IS LEFT UNTURNED.

OUR APPROACH 1

Tuffin Ferraby Taylor (TFT) has built its reputa-tion on always providing the best advice. Clients rely on our reports to manage risk and make decisions promptly and precisely. We deliver best practice with an innovative, client centric approach. We understand buildings, we know how they function and we know how they fail. We recognise the investment and development issues.

We have in-depth experience, headed by highly active Partners who all have client-facing roles. Our Partners are regarded as experts in their field and have acquired substantial tech-nical know-how. This technical appreciation of buildings proves invaluable when assessing a property from how it functions for you to how it succeeds as your asset in the property and finance market.

Our Partners sit on a number of industry rec-ognised boards and panels and develop and dis-seminate cutting edge thought. For example, TFT Executive Board Partner David Mann chaired the RICS Working Party which developed the influ-ential ‘Building Surveys and Technical Due Dili-gence of Commercial Property Guidance Note’.

We have built an enviable reputation for our attention to detail and have developed our TDD reporting to capture, interpret and convey this in plain language and in accordance with the lat-est RICS Guidance Note. Going that extra mile for you has become the norm. Our substantial technical skills and broad experience all feed in

to our objective and trustworthy reporting. We offer a bespoke service to meet your exacting requirements. While our reports are both thor-ough and exhaustive, the key information is sum-marised using our ‘traffic light’ system enabling you to quickly form a view of the property.

Our reports are not created in isolation. Suc-cessful TDD is a collaborative affair and we adopt a team approach, liaising as necessary with your Agent, solicitor or other advisors. Our reports help identify site-related issues that may not be appar-ent from desk-top searches or may assist the future management of the building.

M&E issues often bring greater cost implica-tions than the fabric of the building. TFT’s own M&E Division, M+E Consultancy provides build-ing services expertise where required and we also source and manage other specialist partners such as environmental engineers, lift consultants and structural engineers to complement the core reporting. Often, M&E reports are presented as an afterthought in a building report, tucked away in the appendices. TFT’s TDD approach brings them centre stage and makes the findings an integral part of the reporting process.

OUR CLIENTS

TFT provides Technical Due Diligence and Fund Monitoring for many of the UK and Europe’s lead-ing institutions and commercial enterprises.

We have developed long-standing relation-ships and maintained framework agreements, some stretching back over 20 years of continu-ous teamwork.

Our relationships are built around a triangle of excellence linking best clients, best work and best staff which generates highly interesting and rewarding work and in turn helps us to recruit and retain the best staff.

These client relationships are forged on a greater understanding of your needs and delivery of a tailored service which meets your specific requirements. Whether acquiring or disposing of property, TFT brings an independent approach to your portfolio transaction needs. We are not aligned to any commercial agents and our advice is not influenced by other parties.

We apply this impartiality to all of the many sectors we are active in, including office, retail, leisure, industrial, education, residential, mixed-use and heritage. Whatever the asset class, we understand the issues, speak the language and bring an informed and objective approach to the TDD process.

TFT have carried out the technical due diligence on a number of our recent acquisitions. The bal-ance they strike between speed of turn around, thoroughness and commerciality means we will continue to use them moving forward. — OLIVER SMITH

ASSET MANAGER CENTRAL LONDON PORTFOLIO, THE CROWN ESTATE

I would like to thank you and your team for the tremendous contribution and hard work you are putting in this project. In my opinion, it goes beyond any professional commitment. So thanks again for your effort, flexibility and understanding.

— JOSE BORREGON COUNTRY MANAGER, SPAIN CBRE GLOBAL INVESTORS

TFT’s building survey team display excellent technical knowledge, are swift to act and show a high degree of initiative in meeting the high standards of technical due diligence that the Bank requires. Their reports are thorough but the approach is both practical and commercial.

— MICHAEL C. WOODGATE SENIOR PROPERTY ANALYST DEUTSCHE HYPO LONDON BRANCH

WE’VE STRUCTURED OUR TECHNICAL DUE DILIGENCE PROCESS SO THAT IT’S LESS ABOUT A DELUGE OF INFORMATION, AND MORE ABOUT MEANINGFUL INSIGHT.

THE ROLE OF TDD

Technical Due Diligence (TDD) is the process of research, analysis and discovery in which a prospective purchaser, occupier or financer of property gathers information about the condition, physical characteristics, site and surroundings of a property.

Properties are rarely free from defects or deficiencies which could impact upon the short, medium or long-term performance of the invest-ment. Issues may include the need for repair or refurbishment arising from a lack of planned maintenance, neglect or misuse, insufficient capacity, site issues and/or regulatory non-com-pliance. Understanding these issues helps iden-tify any risk involved and supports your negotia-tion process from a position of strength.

The role of TDD has shifted from its original form as a Building Survey. No longer is it suf-ficient to purely report on the condition of the building. Today’s more rigorous and commercial environment calls for TDD to become a key risk management tool to help you identify the limita-tions and opportunities of an investment in order for an informed decision to be made. Bringing real insight to minimise risk and future-proof the investment.

TDD has changed in line with emerging trends of voids and shorter leases, green leasing, sustainability and ever more stringent legislation, all demanding a wider viewpoint. Opportunities may need to be considered, such as the feasi-bility of adding an extra floor. Landlord and ten-

ant issues may need to be resolved from a neu-tral standpoint. Extensive M&E systems, such as heating and cooling, ventilation ductwork, BMS and drainage often present greater issues than the building fabric itself – although the problems are often not visible.

And the spectre of building obsolescence means that longer-term viability is firmly on the agenda with energy and environmental concerns making some buildings unmarketable and there-fore unlettable with catastrophic effect on port-folio values.

TFT takes an integrated and rigorous approach to all these issues, identifying poten-tial liabilities, advising on correcting deficiencies and recognising future costs to help support your negotiation process and subsequent transaction decision.

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1. Analyse condition and understand design2. Assess suitability for intended use3. Identify and allocate risk4. Quantify costs and other liabilities5. Identify opportunities6. Advise on matters that affect value7. Satisfy lending requirements of financiers

The scope of TFT’s TDD reporting starts with the inspection, from confirming access to rec-ommendations for further investigation. Statu-tory compliance and environmental site factors to identify hazards such as flooding or invasive vegetation are noted and any structural or fabric issues can be fed back to you prior to submission of the complete report.

Building services inspections, either in con-junction with TFT’s in-house team or through external specialists report on mechanical, elec-trical and public health services installations as well as establishing the condition of lift, leveller or escalator installations.

We orchestrate all of this for you and partner with a number of specialists to identify, labora-tory test, confirm and rate site contaminants and other potential site risks.

TFT’s TDD process involves a full documen-tation review during the inspection including PPM schedules, statutory compliance, H&S and Operating and Maintenance manuals, manufac-turers’ guarantees, leases, sub-leases, alterations licences and party wall awards.

Repair works to remedy structural and fabric defects are estimated and a budget cost iden-tified at the time of inspection. Our approach interrogates ownership and lease structures and through our understanding of property obliga-tions we can advise on cost apportionment and liabilities. The report’s main findings are con-firmed to you soon after the inspection and

an executive summary submitted within a mat-ter of days of the inspection. The full report is issued to the team in interactive electronic for-mat. You might also want us to provide you with a hard copy.

THE TDD PROCESS

ADVISING ON THE INCREASING ROLE OF SUSTAINABILITY IN LEGISLATION, FUTURE FORECASTING, AND IDENTIFYING OPPORTUNITIES TO MAKE THE MOST OF YOUR ASSET. ADDING VALUE IS ALL PART OF OUR MAKEUP.

ADDED VALUE

HOW WE CAN HELPCASE STUDIES

TFT has 40 years of experience as an independ-ent provider of Technical Due Diligence, work-ing on our clients’ behalf throughout the UK and across Europe.

We provide critical advice throughout the life cycle of any building within your portfolio, whether you are expanding it and needing pre-acquisition surveys, assessing it through condi-tion reports or disposing of assets advantageously through vendor surveys.

You often need a strategic approach to property disposal and accordingly, TFT have responded by devising a 2 stage vendor survey designed to shorten transaction times, improve buyer confidence and maximise the sales price. The 1st stage alerts you to deficiencies and pro-poses remedies. The 2nd stage report includes a detailed and objective survey of the property which meets the due diligence requirements of potential bidders speeding up the transaction process reducing disruption to the tenant.

Whatever the need, we recognise that it is important to have a fast flow of information and we have gained an enviable reputation for prompt, accurate turnaround of surveys from initial instruction, through site inspection to report delivery. Some examples of recent instruc-tions follow.

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COVENT GARDEN PORTFOLIO, COVENT GARDEN, LONDON WC2LEGAL & GENERAL

The instruction from L&G saw our client purchasing a £120 million Covent Garden portfolio from ING, in a headline making deal. Part of the remit was to have the whole surveying process turned round in one working week and involved having surveyors on sites for seven days in a row.The portfolio acquisition was prime real estate and a unique investment solution for capturing value from larger volume trade in late 2009. Competition was high from a number of investors with condi-tions of purchase depending on the ability to move fast and complete the purchase in an incredibly short timescale, without compromising on the highest standards of complex technical due diligence.TFT’s surveys were cleared within five days of instruction.

WEST QUAY SHOPPING CENTRE, SOUTHAMPTONGIC REAL ESTATE

TFT was employed by GIC Real Estate to carry out a pre-acquisition survey and report of West Quay shopping centre in Southampton.This is a large site – at the time of survey, it was the largest shopping centre in the South of England and since opening in 2000, West Quay has received more than 120 million visitors. It has also been rewarded with a clutch of awards and record number of satisfied visitors.It needed a team of surveyors, environmental and M&E engineers to inform and deliver the report.TFT project-managed this wider

QUEEN STREET PLACE, LONDON EC4NORWICH PROPERTY TRUST, C/O MORLEY FUND MANAGEMENT

TFT inspected this prominent, riverside mixed-use building and prepared a pre-acquisition condition survey report for Norwich Property Trust.As part of our instruction, we surveyed the building’s extensive vaults that run underneath the South-wark Bridge approach road. We also reviewed and commented on all documentation relating to the recent £24m extension and refurbishment. These works included infilling the perimeter atria to increase net lettable floor space. We appointed sub-consultants to inspect the mechanical and elec-trical installations, and assist in reviewing relevant M&E documentation.Our client subsequently acquired this fully let property. Tenants now include law firm SJ Berwin, Volkswagen UK, NCP and The Little Ship Club.

TRAFALGAR HOUSE, 12-14 WATERLOO PLACE, LONDON SW1THE CROWN ESTATE

TFT were commissioned by The Crown Estate to undertake technical due diligence incorporating a comprehensive building inspection and report. The Grade II Listed building was offered to market as a refurbishment prospect with vacant possession on the upper floors. As part of our commission, we prepared a feasibility study for refurbishment.The technical due diligence process identified a backlog of outstanding repair and maintenance required at the property. The Crown Estate were able to negotiate a substantial reduction in the sale price that would enable the necessary repairs to be undertaken properly within the budget allocated for the wider property refurbishment. Our advice helped to turn a marginal deal into a good invest-ment prospect.

1 OLD BOND STREET, LONDON W1GRESHAM DOWN CAPITAL PARTNERS

TFT were appointed to carry out a pre-acquisition survey on behalf of a foreign investor through com-mercial agents, Gresham Down Capital Partners on this office/retail building in the heart of Mayfair.The building is located on the junction of Old Bond Street and Piccadilly. Watches of Switzerland occu-py the building on the ground floor and basement and Ralph Lauren have offices on the upper floors.The value of the sale according to property week is reportedly in excess of £14 million.

20 ST MARY-AT-HILL, LONDON EC3BELTANE ASSET MANAGEMENT

TFT were engaged to complete technical due diligence incorporating a comprehensive building inspection survey and report, and calculation of building reinstatement cost for insurance purposes. The building was offered to market as a refurbishment prospect with vacant possession.Our report included appropriate recommendations for the installation of solar shading during replace-ment of the defective window installations and also suggested suitable low energy services systems for incorporation within the proposed refurbishment.Services installations at the property were known to be inoperative prior to our inspection. We were able to provide a detailed description of the installed systems from a building surveyor’s perspective thus negating input from and cost of a separate services engineer.

81 BERWICK STREET, LONDON W1SHAFTESBURY SOHO LIMITED

On completion of the TDD report, TFT acted as Lead Consultants to convert the upper floors into residential use and to carry out external repairs and redecorations. As Lead Consultants, TFT acted as Party Wall Surveyors, CDM Co-ordinators, Contract Administrators, Heritage Consultants and also liaised with the Planning Consultants and Conservation Officer.The works specifically included the formation of three new independent flats over three floors. New kitchens, bathrooms, services, flooring and finishes were installed. The communal staircase and toi-lets were refurbished. External works included roofing, replacement windows and rainwater goods, new skylight and smoke vent, general repairs and redecoration.

BOW BELLS HOUSE, 1 BREAD STREET, LONDON EC4GLOBAL PROPERTY FINANCE LIMITED

TFT were appointed to survey and report on the building for pre-acquisition purposes which included the management of other consultants appointed to the team and the co-ordination of their reporting.The property was BREEAM rated ‘very good’ and we were able to recommend potential improvements to the performance of the building services installations through our review of the EPC certification. We were able to advise on the potential risks involved for future redevelopment.We undertook a proactive role working closely with the purchaser’s agent and lawyers to ensure a smooth transaction in a tight timescale, as well as ensuring that other consultants met the overall objectives of the scheme. Due to the amount of information presented with this purchase including the aforementioned legal agreements, we were under intense pressure to ensure all was accounted for in the due diligence exercise, necessitating much out of hours working to achieve the client’s aims.

ABBEY PORTFOLIO, UKING REAL ESTATE INVESTMENT MANAGEMENT

ING Real Estate were advised by TFT on the £1.2 billion acquisition of the Abbey Group portfolio, believed to be the biggest property deal in the UK at that time.TFT was responsible for reviewing the vendor survey reports relating to the 128 properties in the portfolio. We also produced summary analysis reports and risk ratings for each of the properties.We inspected several of the buildings - a mixture of offices, high street retail outlets, and retail and industrial warehouses. This in some instances involved commissioning specialist concrete tests and providing detailed information relating to specific defects.

ISO OMENA SHOPPING CENTRE, HELSINKI, FINLANDGIC REAL ESTATE

TTFT carried out a Pre-Acquisition survey and report of the Iso Omena Shopping Centre in Helsinki for GIC Real Estate. This included the project management of the survey team including M&E, and environmentalWe organised a team of surveyors from TFT and worked with WSP in the UK and Finland offices for Environmental and M&E services. TFT also liaised with Finnish engineers and cost consultants and employed a specialist materials testing company from the UK.We also advised on proposed future development projects at the Centre.TFT supported GIC Real Estate with the assessment of the viability of purchase, including review of ongoing service charge issues and proposed repairs.

THE WESTIN EUROPA & REGINA, VENICE, ITALYDEUTSCHE BANK

Deutsche Bank instructed TFT to carry out Technical Due Diligence on the Westin Europa & Regina.Located on the Grand Canal in Venice, The Westin Europa & Regina, Venice, is a picturesque five star hotel that faces the beautiful Baroque church of Santa Maria della Salute in a peaceful corner of Venice.The palazzo buildings are constructed on 14th century timber piles – the condition of which was reviewed by our TDD team.Amongst the many interesting and unusual features is the Venetian plaster found in most of the rooms – up to twelve layers of thinly applied and hand polished material result in an almost translu-cent glass like finish. The original plastered ceilings are formed on a base layer of local reeds, farmed from the lagoon.

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