Real Estate Due Diligence can take a piece of the $300 million square foot pie of existing and planned commercial office buildings. In the next 2-3 years, the top six cities (Bengaluru, Chennai, Delhi-NCR, Hyderabad, Mumbai, and Pune) will see a strong pipeline of office buildings, with approximately 180 million square feet of Grade A office stock in various stages of construction.
At the same time, these top cities have Grade A office buildings of approximately 120 million square feet that can be renovated. According to Colliers’ latest report, ‘Technical Due Diligence: Risk-proofing Realty,’ developers and investors are seeking professional expertise to evaluate their upcoming projects and solutions for the upgrade of their existing ageing buildings.
The detailed report demonstrates how Due Diligence can assist various stakeholders in taking precautions to protect their investments. It ensures that a property is developed in accordance with prescribed standards at a time when there is a greater emphasis on aspects of sustainability (ESG) and health and wellness. The assessment also provides a path to reduce uncertainties and maximize a project’s potential profitability.
“Real estate investments are increasing, with increased interest from global investors.” When compared to the previous five-year period, foreign capital flows in real estate increased threefold to USD24.0 billion in the last five years. As the country’s investments increase, there is a greater demand for cutting-edge real estate projects that are technically and operationally sound.
Due Diligence on a property costs less than 0.3% of the total project cost. Due Diligence can assist developers and investors in risk-proofing their prospective projects as they expand into new geographies and asset classes.
“The benefits will outweigh the costs incurred because it can save the stakeholder significant money, time, and legal hassles,” says Jatin Shah, Colliers India’s Managing Director, Technical Due Diligence.
Developers, investors, and even occupiers can use Due Diligence services for under-construction buildings to get a better return on investment, timely risk mitigation, and greater transparency during the transaction process.
The top six cities have approximately 120 million square feet of ageing Grade A stock that is more than 15 years old. Due Diligence can assist developers and landlords in understanding the scope of upgrades and attracting more occupiers, particularly in prime micro-markets of major cities.
Due Diligence experts can advise developers and investors on how to renovate their older properties. Upgrading old office buildings will help them gain more traction with occupiers, increase their value, and increase their longevity.
“Following Covid-19, developers and investors have become more concerned about the project’s efficiency. It has become critical for them to understand the risks and benefits of any potential project. Stakeholders can reduce risk in their projects by investing in Due Diligence and maximizing their returns on investment “Colliers India Senior Director of Research Vimal Nadar says
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