TOOL 1.4
PROPERTY INVESTORS
| Business | • Loss of key personnel • Major acquisition/divestment • Significant increase in or change in nature of competition for the investment property • Slow sales/lets compared to plan • No evidence of contracted sales/lets • Small deposits • Price reductions/special offers • Oversupply in location • Loss of important tenant • New legislation/regulations • Tax/fiscal changes • Change in economic conditions (growth/recession, exchange rates, interest rates) • Legal action being taken by or against client • Disputes • Competitors/peers in problems • Negative press/media reports • Rumours • Collapse/rapid change in share price • Too many projects • Too big a project • Management skills/time overstretched • Track record of investor shows lack of experience • Due diligence on prime movers not undertaken with vigour • No evidence of full management team • Lack of communication with client • Change of managing agent • Voids • Location • Calibre and financial strength of tenant • Strength of lease ‒ What it covers ‒ Term ‒ Break clauses ‒ Rent reviews ‒ Obligations • Management of common areas • Overdue rent reviews • Secondary level retailers • Investment spread • Long term plan? • Yield/capitalisation rate |
| Management | • Changes of senior management (especially if unexpected) • Lack of strategic plan • Frequent strategy changes • One man show • Lack of succession • Complex corporate structure • Arrogant behaviour towards funders, creditors, media • Unwillingness to provide information • Lack of openness/honesty • “Trophies” – new head offices, expensive sponsorships, ownership of sports teams etc. • Poor labour relations • Lack of experience mix • Remuneration/lifestyle |
