Due Diligence Across Three Markets

Australian technical due diligence is commonly carried out by building consultants, with engineers for services and structure as required. A typical report covers the condition of structure, envelope and services, statutory compliance including the building’s fire safety and essential safety measures records, and a capital expenditure forecast, often over ten years. Environmental, make-good and specialist issues may be separate.

Reports tend to be written for the purchaser and its financiers, and the capital forecast often feeds directly into the price negotiation and the investment model.

In Britain, chartered building surveyors lead most commercial building surveys and technical due diligence, again with engineers for mechanical and electrical systems. Reports commonly cover condition, deleterious and hazardous materials, statutory compliance, energy performance in light of minimum standards, and a capital schedule. Because so much British commercial property is leased, the interplay between condition and lease obligations, service charges and dilapidations often receives particular attention.

The energy rating as a letting rule has made EPC pathways a growing part of British due diligence.

In the United States, the property condition assessment is a well-defined product, commonly prepared to the ASTM E2018 standard and frequently commissioned for a lender. It typically identifies immediate costs, items needing prompt attention, and projects replacement reserves over a term, often around ten to twelve years, usually through a walk-through survey and document review rather than intrusive investigation. A Phase I environmental site assessment is normally a separate report, and seismic risk reports are common in some regions.

The standardisation makes reports consistent and quick to compare. Their framing around a loan can mean they say less about strategy, functional obsolescence or the owner’s options.

The three products answer the same first question, what will this building cost to own, but they are shaped by who usually commissions them.

Each market’s due diligence rests on a different kind of document, and their status matters when a report is relied on.

For an investor, the practical consequence is that the same words, a due diligence report, describe documents with different scopes, horizons and obligations. Reading the governing document, or asking which one a report was prepared under, is part of reading the report.

The best due diligence reports in any market are explicit about four things. Access: what was and was not inspected, and why. Evidence: which conclusions rest on documents, which on observation and which on inference from age and type. Scope: what was excluded, such as environmental, geotechnical, services testing or compliance audit. And confidence: how firm each capital figure is. A report that is silent on these is harder to use than one that is modest about them, because the reader cannot tell where the risk sits.

When Moyne Ross takes findings from a third-party report into a register, these four things decide the confidence rating on each line and whether an investigation item is needed.

For an investor working across markets, three differences matter most. Horizons and categories: immediate, short term, replacement reserve and ten-year forecasts are not cut the same way. Evidence: some reports rely on a walk-through, others on deeper investigation, and few say clearly which conclusions rest on which. And purpose: a lender’s report and an owner’s strategy weigh different risks.

A structured register helps bridge them. Expressing every report’s findings as lines with condition, action, cost basis, timing, impact and confidence, in one set of horizons, makes reports from different markets comparable. It is also how Moyne Ross approaches every building, wherever it is. See Same Thing, Different Name for the terminology.