Creating Value for Occupiers

Property Due Diligence

Introduction

Birse Group Plc was acquired in late 2006 by Balfour Beatty. Birse provides a range of civil engineering construction services to public and private sector customers throughout the UK. Its principal business is in civil engineering, with specialist skills in coastal, rail, water, power and nuclear sectors. It also has a services division that incorporated an IT service contractor, a provider of construction training and a land survey and modelling company.

The portfolio of 21 sites (including one freehold) comprises a total of 127,000 sq ft with a rent roll of £1.25 million.

The brief

Trilogie CRE were asked to inspect both the properties and all legal documentation within the portfolio of properties held by Birse Plc, and report back within 6 weeks of instruction. In particular Trilogie were asked to look at the liabilities arising from the properties, dilapidations, break clauses allowing early termination of leases and upcoming rent reviews. Any vacant buildings still held on lease or leases that had been assigned or sublet to other parties were also inspected. Trilogie were also asked to look at building occupancy and give initial views on the more efficient usage of space.

Key objectives and constraints

Balfour Beatty wanted full knowledge of the portfolio they had acquired so that an initial assessment of liabilities could be made for accounts purposes, hence the time constraints. In addition they needed to know where any property interests could be surrendered or integrated within their existing operational portfolio. Finally, they wanted to know the extent of the development opportunities afforded by the freehold-owned properties they had acquired.

Actions and outcome

All properties were physically inspected and deeds reviewed, all details were summarised and a comprehensive summary report was prepared detailing all actions, observations and recommendations. The report has formed the basis of the ongoing strategy of portfolio rationalisation, and the information uploaded into Trilogie’s property management database to facilitate the ongoing management of the enlarged portfolio.

Trilogie inputs

  •     Surveying all sites
  •     Lease advisory
  •     Non-operational / legacy property management
  •     Project management and building surveying input
  •     Development and initial appraisal advice
  •     Database creation

For further information :
Nick Wright

nw@trilogiecre.com