INDUSTRY

Huge demand for technical due diligence in realty projects to avoid risks

With nearly $50 billion of investment in real estate since 2012, property consultant Colliers India has said that demand for technical due diligence of realty projects has increased as developers and investors look to safeguard their interests and avoid risks. 

In its latest report, Technical Due Diligence: Risk-Proofing Realty, the consultant notes that the cost of conducting due diligence of a property is generally less than 0.3 per cent of the project cost, but the benefits are immense as it can save the stakeholder from substantial loss of money, time and legal hassles. 

“As developers and investors venture into new geographies and asset classes, there is an increased demand for investigations into a real estate project across facets. Understanding associated risks and potential upsides of any prospective project has become pivotal to all stakeholders,” the report adds. 

Investors, developers and occupiers of real estate space are looking for diligent investigation of properties, also known as technical due diligence in real estate parlance. 

“Challenges such as structural defects and statutory risks can have financial implications on developers, while creating a trust deficit for occupiers and investors,” the report notes. 

Technical due diligence provides a structured, in-depth evaluation of properties by undertaking equipment health assessment and outlining critical risks and issues, ranging from compliance and costing to project monitoring on a timely basis. 

The due diligence can be conducted in both completed and under-construction properties. The process is also being done in pre-construction stage for better planning. 

Report By