Leander House, Solent Business Park, Fareham

Instruction Synopsis

Propitas were instructed by Wesleyan Assurance Society to carry out a pre-acquisition survey of this 25-year-old office building, which comprises circa 45,000 sq ft of office accommodation on a ‘Listed X’ status site.

We were appointed to lead the technical team, which included specialist mechanical, electrical, lift and environmental audit reports, as well as ourselves reporting on the building fabric and presented these as a single, fully co-ordinated and cohesive report to the client. Our standard report also included a full Reinstatement Cost Assessment (RCA) for insurance purposes.

We co-ordinated all consultants’ activities, reporting processes and management of answering general queries, to give the client a single survey report, and point of contact throughout the due diligence process. The instruction also included a comprehensive review of technical information provided in a legal data room and advising on historic maintenance regimes, current defects and future capital expenditure requirements.

HOW PROPITAS ADDED VALUE

Our report and advice was tailored to specifically take account of the client’s proposed hold period, including the likely dilapidations recovery from the tenant that were assumed to vacate during the hold period. The initial feasibility advice on scope and budget for future refurbishment and improvement works provided the client with early insight for considering potential asset management initiatives. The unusual terms of the occupational lease presented difficulties in enforcing the repairing obligations on the tenant at lease expiry. By advising on non-recoverable costs and obtaining further legal analysis, we were able to determine financial exposure to enable the client to make an informed decision about the acquisition.

The site was subject to restrictive covenants imposing specific repair, maintenance and environmental obligations that were out of the ordinary. Propitas advised on breaches and consulted with the client’s legal advisor to enable the client to fully assess the level risk within the overall context of the acquisition and appropriate indemnities were procured to safeguard the client’s interest from future liability.  Our commitment to assist the client in mitigating any specific risks relating to the acquisition meant that the final report was issued with no open-ended questions or outstanding points.

KEY INFORMATION

• Technical compilation of summary pre-acquisition report.

• The summary report was provided within 7 days and highlighted the need for specialist further inspection, which we managed on behalf of the client.

• We flagged up a number of issues within the drainage to the site in order for the client to renegotiate.

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