It is essential to understand the potential risks or expected costs in adhering to the technical requirement and cost of rectifying existing faulty system equipment before committing to a property deal. Technical due diligence helps assess the condition of existing systems, adequacy of the system to suit requirements, and subsequent upcoming capital investments, which assures closing the property transaction.
The electrical system is one among many essential services of any property. Due diligence of electrical systems also becomes a key factor contributing to the property transaction. The architecture and design of the electrical system vary with different tenant applications in the building.
Assessment of system starting with standards /codes compliances, design, statutory approvals, sanctioned power, adequacy of equipment till the AMC’s and operating conditions of existing equipment including the recommendation of required up-gradation to meet the buyers expectations become most essential factors in evaluating the property.
Essential elements of the electrical system to undergo assessment during technical due diligence covers the following:
• Project/building brief technical specifications
• NOC’s
• Design brief reports
• Bill of materials and technical specifications for the system
• Construction drawings
• Testing and commissioning reports
Observations on the above vital elements are followed by a site visit of the constructed property. Site visit becomes a crucial part in assessing the installed system in due diligence concerning the following:
• The code compliances
• Visual and some functional checks
• Containment adequacy
• The installation quality of the system
• Keynotes on anticipated potential threats due to non-adhering to the norms
• Observations on the life of the equipment
With the above activities, a detailed report delivered to the property buyer, covering:
• Observations on pre-construction, construction, and post constructions elements.
• Recommendations for up-gradation to suit buyer’s requirement, highlighting concerns and constraints.
• Suggestion on increasing reliability of the system for a long life by upgrading equipment with new technologies.
• The anticipated cost to complete, rectify and upgrade as per the norms and client requirement.
This detailed auditing process benefits the client for a potential deal or investment opportunity verifying all relevant technical facts and financial information and assures closing of the property transaction.
Assessment of system starting with standards /codes compliances, design, statutory approvals, sanctioned power, adequacy of equipment till the AMC’s and operating conditions of existing equipment including the recommendation of required up-gradation to meet the buyers expectations become most essential factors in evaluating the property.
Essential elements of the electrical system to undergo assessment during technical due diligence covers the following:
• Project/building brief technical specifications
• NOC’s
• Design brief reports
• Bill of materials and technical specifications for the system
• Construction drawings
• Testing and commissioning reports
Observations on the above vital elements are followed by a site visit of the constructed property. Site visit becomes a crucial part in assessing the installed system in due diligence concerning the following:
• The code compliances
• Visual and some functional checks
• Containment adequacy
• The installation quality of the system
• Keynotes on anticipated potential threats due to non-adhering to the norms
• Observations on the life of the equipment
With the above activities, a detailed report delivered to the property buyer, covering:
• Observations on pre-construction, construction, and post constructions elements.
• Recommendations for up-gradation to suit buyer’s requirement, highlighting concerns and constraints.
• Suggestion on increasing reliability of the system for a long life by upgrading equipment with new technologies.
• The anticipated cost to complete, rectify and upgrade as per the norms and client requirement.
This detailed auditing process benefits the client for a potential deal or investment opportunity verifying all relevant technical facts and financial information and assures closing of the property transaction.
Srivani RP is the Senior Manager- Design (Electrical) and assisting the Technical Due Diligence team at Colliers. Srivani has accelerated the success of several clients under the guidance of Jatin Shah and Yashoda Seshadri.