Every property investment opportunity that is presented to IPIN's members has been subjected to a thorough, tailor-made due diligence process.
We only select projects that match strict criteria
Our Acquisitions team receives requests from property developers to work with IPIN Global on potential projects on a daily basis. The projects are then qualified through our base criteria including the size and type of project, the location, the feasibility of the project, pricing and developer requirements.
Most projects presented do not match the strict criteria required by IPIN Global and Bridgepoint Ventures and are discarded at this initial stage of the process. Usually, only 5% of projects received will be given conditional approval by the committee at this point.
We identify a suitable strategy
Following the offer of conditional approval, the Acquisitions team work on the application or creation of a strategy that will provide a secure, profitable investment to IPIN members and meet the developer’s requirements. The developer is then issued a Deal Terms Outline (DTO) ensuring parties involved are aware of all the terms of the strategy. Once the DTO has been signed IPIN Global and BridgePoint Ventures (BPV) continue to carry out their due diligence process.
The due diligence is thorough and comprehensive
IPIN's due diligence involves five components; each component has a different process and sub-components that make up the entire due diligence process. IPIN Global employ legal counsel and top tier advisors, valuers and research organisations to assist in many aspects of the due diligence in order to verify information provided and ensure it is suitable for property investment.
Read about our current property investment opportunities.
The Components that make up IPIN's due diligence process are as follows:
Development entity and project
Our Acquisitions team’s extensive experience is applied to reviewing each potential project from top to bottom as if undertaking the development ourselves. This gives a thorough understanding of the project prior to beginning a formal due diligence process. Assuming the project meets our initial standards, our Due Diligence team conducts a preliminary search of all individuals and entities related to the project. Assuming the project passes these initial steps the process is then handed to reputable 3rd party solicitors to provide legal opinions and certificates.
- Company information and legal standing
- Articles of association and amendments
- Identification of all shareholders
- Special shareholder arrangements
- Shareholder assets and liabilities
- Business and activity documentation
- Professional references
- Previous projects and performance analysis
- Proof of land title /ownership
- Taxation ID
- Subdivision parcel numbers and verification
- Construction schedule
- Unit analysis (units, sizes, process, orientation)
- Government designations
- Renderings, site plan, floor plans and photographs
Contracts, licences, studies and policies
As sophisticated investors will recognise, a development project is complicated and consists of much more than a proposal and a good General Contractor. Issues such as accessibility, traffic flow studies and utilities requirements are just some of the issues that can delay any project. Through experience we have developed a process that ensures all necessary aspects of a project are received, reviewed and approved, often involving direct conversations with the necessary 3rd party providers.
- Project-permitting documentation and approval analysis
- RSL (Registered Social Landlord) or section 106 agreements (planning obligations)
- General contractor contract
- Head lease
- Purchase contract review
- Hotel management agreement (if applicable)
- Hotel franchising agreement (if applicable)
- Vehicle and pedestrian access information
- Utilities study
- Environmental studies and surveys
- 3rd party feasibility and market studies
- Insurance policies
The global credit crisis has created an extremely tight lending market in which it is vital to understand the stress points and bottlenecks that can stall or halt projects. Understanding the true financial position of all parties concerned with a project, including the lending institutions and equity providers is essential to the due diligence process.
- Developer equity analysis
- Closing and carrying cost analysis (if existing)
- 3rd party valuations
- GDV (Gross Development Value) projections
- Project tax liability
- Fund usage and control
- Cost schedule and budget
- Project profit and loss
- Loans and repayment (existing and historic)
- Bank statements/balance sheet analysis
- Tax returns
- Loan to value and loan to cost analysis
We carry out an exhaustive feasibility study on all projects that progress past the first stage. Projects proposed for investment are assessed to ensure there will be a demand for the property following construction and whether or not the end product will be feasible in the selected market. The feasibility study is conducted in-house and through reliable 3rd party entities. The study includes:
- Location analysis
- Pricing analysis versus local comparables
- End user finance availability
- Local market surplus / shortages (residential / commercial)
- Infrastructure analysis (current and planned)
- Proposed resale exit strategy
- Market demand drivers (universities, hospitals, schools, communications)
- Resale rate of sale projections
Following the comprehensive due diligence process a member of the IPIN Global / BPV team will conduct a visit to the proposed construction site. The visit will involve an inspection of the site and surrounding area. These visits will continue throughout the duration of the development process and will occur twice annually for compliance and progress purposes.
The information provided on this page represents a typical procedure applied to potential IPIN Global projects. The due diligence undertaken can and does alter depending on the specifics of any individual project.