Due diligence period (DD)
This is a very critical first step to any successful development for all stakeholders. Because we are a model/portfolio driven development platform we have very clear objectives and metrics we need to achieve in any project that we purchase. Therefore we aim to have a DD period that we negotiate with a Vendor. This ranges from a 60-120 day conditional contract period that gives us the time to;
Create a development concept for what is the highest and best use of the site.
Begin a consultative process with the relevant planning authorities to determine the level of support for the concept. Start conversations with potential tenants and where possible gain heads of agreements to lease space in the development. Complete a comprehensive financial feasibility to determine if the project meets our development and portfolio metrics. Once we have concluded that the development opportunity meets all of our investment and project criteria, we will then enter into an unconditional contract of sale to purchase and develop the site. The settlement periods that we typically negotiate are from 9 months to 2 years depending on the project as our aim is to achieve a Town Planning permit before the site is settled.
Once we have completed our DD period and have gone unconditional on our contract of sale we then go into full design for a town planning application. We do that in consultation with the relevant councils and planning authorities to ensure that what we are creating will have their support. The developments that we focus on tend to be on sites that have right of use for what we want to do so generally we don't need to consider rezoning issues and as such the application periods tend to happen in a reasonable timeframe. Once it appears that we will be granted a permit we then move into full design and documentation together with construction tenders.
During this period as Development Managers (DM) we also begin to secure the construction funding facility together with the ultimate take out finance on completion. Once we have received a permit we also finalise the leasing arrangements with the tenants for the developments.
After receiving a Development Application(DA) having completed the design and documentation we then apply for a building permit. Once this is granted and we have awarded the contracts to the construction team, we begin construction. Over this construction period as DM we manage the Project Managers (PMs), consultants and the lenders. The construction period varies depending on the size and scope of the project. Over the construction period as the DM we provide regular reports to all of the key stakeholders on the progress of the development and liaise with the Tenants around specific needs within their tenancy. Once completed the finished properties are then handed over to the end tenants so they can start building their respective businesses.
This function is performed in conjunction with C2 Capitals P2 funds management team. Leasing and tenancy issues are managed by Multi BD who then may engage a leasing agent to handle the day to day management issues. The objective over this time is to maximise the assets income and capital growth return while ensuring that it is kept in its optimal condition.
The below diagram illustrates the overall development model.