Boost Your ROI: Essential Due Diligence Checklist for Industrial Property Buyers -

Investment in a property is a matter of confidence. Whether residential or industrial real estate, trust in the property exists when due diligence is conducted.

Table of Contents

What is the due diligence of property?

In a nutshell, property due diligence is like a checklist that assists in the thorough examination of the property. It covers all aspects like legal documentation, financial upholding, and physical condition.

Before investing in industrial real estate, it is essential to investigate the property and its credibility. Property due diligence is a must-have for purchasing properties in India.

Industrial Property Due Diligence Checklist

If you as a manufacturer want to secure your investment, here is the must-have industrial property due diligence checklist. This due diligence checklist will help you navigate the complexities of the property investment process.

Legal Verification

Legal verification is the first step in ascertaining the due diligence of the industrial real estate. Real estate is the backbone of all business operations. To invest in an adequate industrial real estate, it is crucial to have a thorough background check. Due diligence of the property ensures there are zero liens or unpaid dues, the property complies with local regulations, and there hasn’t been any neglect of the construction approvals.

Some common ways to ensure industrial real estate is legally sound are title deed verification, encumbrance certificate, land use verification, approvals and permits, and property history. These steps are essential to ensure the property is free of any liabilities or mortgages and that it conforms to the required government and municipal regulations and compliances.

Physical Inspection

Physical inspection, as the term suggests, is the due diligence related to the infrastructure. The property’s structure needs to be properly assessed. Evaluate the strength of the building. Also, check for the status of water and electricity supplies. Evaluate the surrounding area for connectivity and convenience.

Financial Check

Financial assessment is one of the most crucial steps of the due diligence checklist. A sound financial assessment will require market analysis, assessing the property’s tax records, hidden costs, an estimate of property insurance, and investment return analysis. The industrial property’s financial aspect must be free of any encumbrances for future expansion options.

Technical Due Diligence

Mnaufacturing units and other industrial real estate need technical due diligence too. Assessing whether the building’s structure, materials, and services can meet current and future needs, as well as understanding the associated risks, is crucial for identifying potential liabilities, limitations, and costs.

A Technical Due Diligence (TDD) service can provide answers to many questions a manufacturer might have in this regard. Selecting the correct industrial property depends on several questions like:

Is there a Grade A or Grade B specification?
Is the property space suitable for expansion?
Will the property adhere to specific design requirements?
Is the property in compliance with the statutory code and accessibility regulations?

Regulatory Compliance

Confirm that the industrial real estate adheres to local laws, municipal regulations, and environmental regulations. Any type of non-compliance can lead to legal actions, fines, and issues in procuring finances. Ensure that the property complies with local building codes and safety regulations. Additionally, review any future development plans or zoning restrictions in the area that could impact the property.

Builder and Developer Check

The reputation of the builder and developer matters as a priority when investing in industrial real estate. You should also cross-check if the builder has any ongoing disputes.

The Bottom Line?

Conducting thorough due diligence is essential before investing in industrial real estate. It provides a sense of security and trust in your investment by ensuring that all legal, financial, technical, and regulatory aspects are in order. By following a detailed checklist that covers legal verification, physical inspection, financial checks, technical due diligence, and more, you can mitigate risks and avoid costly surprises down the road.

Ultimately, taking the time to perform proper due diligence helps manufacturers make informed decisions, securing not just the property, but also the future success of their business. Investing wisely means investing confidently, and with the right due diligence, you can move forward with assurance.

TownAcre- Industrial Real Estate in Delhi

Under the leadership of CEO Yatharth Agarwal, Townacre has quickly risen as a key player in the real estate industry. Founded just four years ago, the company’s journey began with the purchase and renovation of two buildings, each spanning 165 square yards, for a total of 330 square yards. The successful sale of the first three floors within just ten days set the stage for future growth.

Townacre has since expanded its operations, adding new floors with modern amenities such as Otis and commercial lifts. The company continues to grow its portfolio by acquiring similar properties and completing several high-profile projects.