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Providing due diligence on your property transaction
Real estate PREC ISE . PROVEN. PERFORMANCE .
the underlying income stream and validate
the key financial assertions on which the
proposed acquisition is to be based.
This includes due diligence on the following
areas:
Property holding company:
• assessment of tax liabilities and balance
sheet debts;
• assessment of income, risks, relationships
with other entities;
• forecasting;
• potential for future corporate
restructurings or downgrades.
Property:
• debts accrued;
• income streams;
• service charge void costs if applicable.
Tenant appraisal:
• current and prospective tenants’ ability to
maintain rent payments;
• guarantor arrangements.
Our approach to due diligence provides
comprehensive and timely feedback for
property investors. The provision of reliable
information throughout a transaction is
critical to its success, therefore we ensure
our clients are kept informed through the
whole process. Our output is always
bespoke and provides answers, to help
clients reach informed decisions.
Once the purchase has been completed, we
have the expertise and diversity of skill within
our team which allows us to assist you on an
ongoing basis, in relation to updated tenant
and prospective tenant appraisals.
In today’s economic climate, gaining a
robust understanding of the asset being
purchased and income generated from it is
more important than ever before, with the
due diligence process now a key part of any
property transaction.
The uncertainty surrounding the UK
economy has created a unique set of
challenges for property investors. You face
pressure from a number of sources, not
least of which are your own stakeholders.
We understand that you require solutions
tailored to your needs, from experts capable
of providing an appropriate level of
expertise and independence.
Our aim is to provide investors with a clear
understanding of the counterparties they
engage with and the assets they hold
through a strong, independent due
diligence process.
Our solutionOur primary focus is on the needs of the
investor, taking into account the wider
context in which they operate. This tailored
approach allows them, with our help, to
fulfil their responsibilities and meet the high
expectations of their stakeholders.
Our team is partner-led and includes
individuals with diverse skill sets, including
real estate, corporate advisory and tax
specialists. They all work together as a
cohesive team to provide the integrated
service relied upon by property investors.
As part of our offering, we provide tailored
due diligence services to help prospective
purchasers of property investments assess
CredentialsOur dedicated team is made up of business
advisers drawn from a variety of disciplines
who act for a number of UK and
international property owners and investors.
These advisers are used to working together
and provide an integrated approach
through shared knowledge and experience.
Our understanding of real estate issues
enables us to provide a responsive and
bespoke service, as well as solutions that
meet our clients’ needs.
We act for a property investment fund
manager, with some $800 million under
management. The investor profile includes
the UN pension fund, US pension funds and
Scottish Amicable. As it is international,
some of the funds are UK tax exempt and
are, therefore, offshore. We deal with:
• UK tax compliance matters for non-
resident companies;
• VAT advice on property acquisitions and
disposals;
• general tax advice, including residence,
trading status, structuring of borrowings,
general tax efficiency in the UK and
overseas, and tax-efficient interactions
between limited partnerships.
We act for a UK listed property investment
and trading group concerned largely with
UK commercial properties. Apart from
compliance matters, our services include:
• advising on the tax-efficient structuring of
proposed transactions, including property
acquisitions, disposals and joint ventures;
• advising on the group funding structure,
advising on inter-group loans to maximise
reliefs and minimise deferred tax.
2 Real estate
Providing due diligence on your property transaction
We act as external auditor for a number of
UK and international investment property
funds. In this capacity, we maintain a
relevant and up-to-date knowledge of the
market and monitor significant tenant
developments. Our audit clients include and
investment fund with investment property
sub-funds focused on UK and European
commercial and public sector properties.
The funds comprise approximately seventy
properties with a value of £800m.
What makes us differentSector knowledge
We understand the specific issues
challenging the real estate sector and
individual players within it, and tailor our
advice and services accordingly. Clients
benefit from the experience of our
dedicated team, which includes specialists
with significant knowledge of the real
estate sector.
Partner-led service
We recognise the importance to our clients
of easy access to high quality, professional
advice. As such, our partners not only lead
the assignments and ensure the utmost
quality and efficiency, but will also be highly
visible to senior management.
Understanding of client needs
We know that each client is unique, both in
terms of their requirements and
circumstances, so we focus on tailored advice
and solutions rather than adopting a ‘one size
fits all’ approach. We take time to understand
each business and the motivations of owners
and operators – ensuring we meet individual
needs and support the achievement of
specific client goals.
3Real estate
Recent transactionsCentral London office building,
annual rent £28m
Instructed by a property fund to assess the
impact on covenant strength of a proposal
by a professional services group to assign
its lease from legacy partnerships to the
current UK operating entity.
East of England manufacturing unit,
£20m sale and leaseback
Engaged by property fund to advise on
the seller’s ability to meet lease
obligations following a proposed sale
and leaseback transaction. Identified
serious cash flow risks, as a result of
which a substantially increased rent
deposit was obtained.
Central London office building lease
transfer, annual rent £16m
The tenant was part of a financial
services group that was proposing a
court sanctioned business transfer
scheme under which the lease would be
transferred to another member of the
group. We were instructed jointly by the
property owners and the bank lending
syndicate to advise on the impact on
tenant covenant strength of the
proposed scheme.
Central London office building,
£10m rent guarantee release
Instructed by a property fund to assess
the impact of a proposal by a global
consultancy group for the assignment of
lease and associated guarantee
obligations from legacy partnerships to
the UK operating entity and its overseas
parent. The initial proposal provided for
a £10m bank guarantee to be replaced
by a similar guarantee from the overseas
parent. We recommended a different
security structure in order to maintain
tenant covenant strength.
Midlands storage & distribution unit,
annual rent £500k
Undertook a tenant covenant review for
a property fund, for a tenant who was
part of a privately owned group which
was the third largest wholesaler to the
UK catering industry. After meeting with
tenant’s management we reported on
financial performance and projections.
Our report highlighted that the planned
acquisitions by the tenant might put
working capital facilities under strain,
and therefore we recommended
appropriate security should be taken to
cover the risk of default.
Surrey Light industrial unit, annual
rent £240k
Covenant review for a property fund of a
tenant seeking to take additional space in
an industrial park. The tenant was part of
an overseas listed group that was a leading
global supplier to the oil and gas industry.
We provided an analysis of financial
statements prepared under French
accounting principles and highlighted key
risks including a recently announced
merger that would have a major impact on
turnover and profitability.
Moore Stephens LLP, 150 Aldersgate Street, London EC1A 4AB T +44 (0)20 7334 9191www.moorestephens.co.uk
We believe the information contained herein to be correct at going to press, but we cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein. This brochure is not a substitute for professional advice. Printed and published by © Moore Stephens LLP, a member firm of Moore Stephens International Limited, a worldwide network of independent firms. MSIL and its member firms are legally distinct and separate entities. Moore Stephens LLP is registered to carry on audit work in the UK and Ireland by the Institute of Chartered Accountants in England and Wales. Authorised and regulated by the Financial Conduct Authority for investment business.DPS20277 December 2013
Moore Stephens in the UK
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network, comprising some 1,500 partners
and staff in 35 locations.
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clients as the first point-of-contact for all their
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achieve this by providing sensible advice and
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estate, shipping, transport and public sector.
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With fees of US$2.5 billion and offices in 101
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By combining local expertise and experience
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Andrew Potts – Partner, Head of Real Estate
Andrew is responsible for the development and servicing of clients
in the real estate sector. He has extensive experience in UK
reporting standards and how they affect operations, and regularly
advises on business structuring, financial control and corporate
governance, as well as providing audit and compliance services.
Through his significant network of contacts within the real estate
sector, he speaks to agents, investors and valuers on a regular basis,
accumulating knowledge of the market.
Jeremy Willmont – Corporate Advisory Partner
Jeremy’s corporate advisory expertise has developed through a
wide range of assignments, including business reviews and
financial modelling, as well as a secondment to the restructuring
group of a major clearing bank. Jeremy regularly performs tenant
covenant reviews for real estate investors and lenders, and provides
financial advice in relation to business transactions. These services
assist property investors in managing their cash flows and can
often support the value of the asset.
Jacquelyn Kimber – Business Tax Partner
Jacquelyn has over fifteen years’ experience advising both corporate
and non-corporate clients on a broad range of UK and international
tax issues, including tax-efficient ownership structures and
tax-efficient property structures. She acts for a range of property
investors and developers and provides services ranging from initial
set-up advice to ongoing compliance support and exit planning.
Steve Wheeler – Associate, Non-resident Landlord Specialist
Steve is a tax associate in the Private Client Services team. He
specialises in providing advice to UK and non-UK domiciled, high
net-worth individuals and advising on non-residents investing in
UK commercial and residential property. Steve has considerable
experience in carrying out due diligence on acquisitions of overseas
intermediaries, making planning suggestions and ensuring they are
UK tax compliant.
Contact informationIf you would like further information on any item within this
brochure, or information on our services please contact:
