RIGHT… WRONG…

LPC Due Diligence Insight Series | Part 1 of 3

A property can tick every box and still be the wrong decision.

Many businesses choose a property that appears to fit the brief, only to discover later that it locks in avoidable cost, operational constraint or reduced flexibility.

Location, size, cost and presentation are important considerations. But assessing a property against a list of requirements is not the same as establishing whether it is the right commercial decision.

The distinction lies in the quality of the due diligence undertaken before a commitment is made.

Right… Start with the business, not the building.

Before assessing a property, establish what the business needs to achieve, what it can afford and what may change over the proposed lease term.

A property decision should be tested against the realities of the business: its people, operations, financial position and future direction.

That means considering not only whether a space works today, but whether the lease terms, building capabilities and associated costs will allow the business to adapt.

A lower rent may be offset by higher operating costs. A building that accommodates current headcount may offer limited scope for growth. An attractive incentive may come with lease obligations that restrict future options.

These are not secondary considerations. They can fundamentally change the commercial value of a property.

Wrong… Treat due diligence as a final check.

Due diligence is often approached as a process of confirming that a preferred property is suitable.

The problem with this approach is that the decision has effectively already been made.

Once a business has invested time and resources in a preferred option, there is a risk that due diligence becomes an exercise in validating that choice rather than challenging it.

Important questions may be asked too late, when the business has less time to explore alternatives or negotiate more favourable terms.

Due diligence should inform the decision, not simply confirm it.

It should identify the risks, costs and constraints associated with each option while there is still an opportunity to act on that information.

This includes understanding the full cost of occupation, testing the building's operational suitability, examining lease obligations and considering the consequences of changing business requirements.

The objective is not to eliminate every risk. It is to understand which risks the business is accepting, whether they are commercially justified and what options remain if circumstances change.

Watch the webinar extract: Getting due diligence right.

Use this extract as a practical checklist before shortlisting or committing to your next property.

A decision that stands the test of time.

Good due diligence gives a business the information it needs to make a considered property decision, with a clear understanding of the trade-offs involved.

The right property is not necessarily the one that satisfies the most requirements today. It is the one whose commercial terms, capabilities and limitations are understood and aligned with the business's objectives.

Business before space. Futureproof today.