Every property investment opportunity that is presented to IPIN is subjected to a thorough selection, approval and due diligence procedure prior to release. The procedure changes significantly depending on the type of opportunity. IPIN Global Capital Ltd assumed responsibility for the due diligence and selection process from BridgePoint Ventures in 2014 and implemented a revised process consisting of a number of elements within several phases.
For ownership opportunities it generally has more of a focus on the local market demand and drivers to ascertain if the opportunity represents potential growth or is likely to generate reliable rental income over a sustained period of time. It includes the factors set out below.
For non-ownership opportunities the process varies and is described specifically in relation to the investment concerned.
- - Our Acquisitions team has developed a model whereby the opportunity is assessed from a macroeconomic perspective, here we analyse the country in which the proposed project is based against indicators and averages.
- Once we are satisfied that the particular country is one which satisfies our macro-economic examination, we begin to analyse the city or town in which the opportunity lies.
Development Entity and Project
Our Acquisitions team´s extensive experience is applied to reviewing each potential project from top to bottom as if, in many ways, we are undertaking the development ourselves. This gives a thorough understanding of the project prior to beginning a formal due diligence process. When looking at any potential project the following risks are assessed.
- Planning Risk – An assessment of the current planning status or likelihood of achieving the required planning permission to deliver the proposed project
- Funding Risk – Analysis of the financial requirement to successfully deliver the project and research into if funding is secured or if it is realistic based on key project matrix
- Construction/ Completion Risk – A study into what potential threats may exist to the successful delivery of the project
- Market Demand Risk – Analysis of the demand for the completed project and the expected rate of sale
- Yield Demand Risk – Research into what type of rental demand and at what level the completed project will generate. Typically in association with reputable local agents
- Transactional Risk – A process to ensure that the sales process is as safe as it can be with funds being sent to reputable 3rd parties and the execution of contracts managed by legal representatives
- Exit Risk – What is the strategy for investors to realise a gain, financial benefit from the investment and what risks exist that may impact this now and in the future.