Unlocking value as Real Estate markets regain momentum

After several years of uncertainty, the real estate market is starting to move again. Interest rates are easing, pricing is stabilising and more assets are coming to market. For many investors and owners, this is the time to revisit acquisition and divestment plans.

Every acquisition or disposal process requires detailed investigation, evaluation and ultimately, challenge. Using an independent due diligence provider can assist with, and provide independence and management support for, acquisition processes. For disposals, it can assist with asset positioning including anticipating buyer queries and concerns, and pre-preparing robust responses to help mitigate any risk pricing.

We focus on the fundamentals that drive value; the leases, the cashflows and market context, and can coordinate, if required, the associated technical and legal diligence threads.

Our work typically includes a detailed review of tenancy documentation, assessment of how lease terms align with market practice, analysis of budgets and models against actual leases, and reconciliation of net operating income and key assumptions. We then summarise the key findings in focused executive summaries, and if required, detailed and verified schedules that become the single source of truth for your decision and handover processes.

Our team is made up of senior sector specialists and valuers who have spent much of their careers working in and around the markets they now review. We have experience across office, industrial and logistics, retail, hotels and other accommodation, retirement housing and healthcare, student accommodation, data centres and self-storage. We can also work closely with PwC Legal, Tax and other specialist teams to deliver a coordinated, end-to-end due diligence service through a single point of contact.

This breadth means we understand how different income streams behave through the cycle and what ‘good’ looks like in each sector. We regularly act on complex or specialist assets and portfolios where investors want both a technical and legal view of the property and an independent view of the commercial and financial drivers of value add.

Whether you are a vendor preparing an asset for disposal or a purchaser competing for a new opportunity, our role is to help you focus on the issues that matter for value. For organisations with lean teams or growing platforms, we can act as an extension of your in-house capability, managing the detail of the diligence so you can focus on strategy, stakeholders and execution.

A recent engagement with a KiwiSaver investor illustrates the value of this approach. Our client was assessing the acquisition of a modern logistics facility, marketed via an expression of interest campaign on a compressed timetable. PwC inspected the property, reviewed the information memorandum, leases and data room material, completed a gap analysis, and provided commercial commentary on key issues including market value framework, lease structure, rental levels, tenant profile, and market drivers. We also helped frame the investor’s expression of interest, giving their investment committee a clear view of risks and value drivers which ultimately supported their successful offer and acquisition.

If you are planning an acquisition or disposal in the next twelve months and would like to pressure test your assumptions, we would be pleased to discuss how our real estate due diligence team can support you.