What the buyer finds when nobody has prepared the asset technically

A fund managing EUR 400 million of real estate assets. Its largest warehouse has been in the portfolio for 8 years. When it goes to market, the buyer runs the TDD.

What shows up in the report

• The square metres in the lease do not match the cadastre. Difference: 600 sqm.
• The drawings date from 2014. There have been two refurbishments since.
• The energy performance certificate expired in 2022. Nobody renewed it.
• The fire protection system was modified, but the modification was never regularised.

None of these points is, on its own, a structural defect. Together, they are negotiating ammunition. The buyer is not questioning the quality of the asset: they are questioning the reliability of the information about the asset. That always translates into price, timetable or warranties.

The real cost is not the repair

Reconciling areas, updating as-built drawings, renewing an energy certificate and regularising a fire protection modification all carry a bounded, perfectly budgetable cost.

The real cost is different: the discount the buyer applies for uncertainty, the weeks of process lost while documentation is sorted out, and the signal it sends to the market about how the portfolio is managed.

This is not an isolated case

It is the standard pattern in 70% of the due diligence processes I take part in. Funds are highly sophisticated on the financial and legal side. The technical side almost always reaches the market unprepared.

And it is the part the buyer looks at first, because it is the only one they can verify themselves on site.

What to review before bringing an asset to market

1. Areas: lease, cadastre, land registry and physical measurement reconciled in a single table.
2. Graphic documentation: as-built drawings updated after every refurbishment.
3. Valid certificates and licences: energy performance, activity, occupancy, statutory inspections of installations.
4. Regularisation of every executed modification, particularly fire protection and building services.
5. Deferred CAPEX identified and budgeted by the vendor, before the buyer estimates it.

When did you last audit an asset technically before putting it up for sale?