Commercial real estate due diligence tests whether the shopping mall being offered for sale matches its documents, income records and physical condition. The buyer needs an evidence trail from each material assumption to a decision: proceed, change the terms, request further investigation or stop. A useful checklist therefore identifies the reviewer, the information required and the evidence needed to close each issue.
Define the acquisition before defining the investigation
Confirm what is being bought: land and buildings, an operating business, selected assets or shares in the property-owning company. A share acquisition also requires attention to the company's liabilities, tax history, employees and guarantees. An asset purchase still needs a review of how contracts, permissions and obligations will transfer. Neither structure can be assessed using a property brochure alone.
Agree the scope with legal, tax, financial and technical specialists. Record the reporting period, site access, materiality criteria, delivery dates and who may rely on the reports. Local advisers should confirm jurisdiction-specific requirements and contractual consequences. This checklist is a coordination framework, rather than a legal opinion on a particular transaction. A valuation is a separate workstream informed by the findings.
Build a data room that supports verification
Use a controlled data room with dated versions, named owners and an outstanding-information log. Distinguish seller statements from signed documents, official records and observations made on site. Mark unavailable evidence as unverified. The following request list provides a starting point to adapt to the asset.
| Workstream | Evidence to request | Question to resolve |
|---|---|---|
| Title and authority | Current property records, corporate documents and signing authority | Do the seller, property boundaries, rights and encumbrances match? |
| Permissions and use | Approved plans, building and occupancy permissions, inspection records | Does actual use match the documented approvals? |
| Tenancies | Rent roll, signed leases, side letters and security documents | Are income, expiry, break rights and concessions accurately recorded? |
| Financial records | Operating statements, ledgers, bank records and aged receivables | Can billed income and collections be reconciled by period? |
| Technical condition | Maintenance history, site inspection and specialist reports | What safety issues, replacements and inspection limits exist? |
| Environment and operations | Environmental records, insurance, service contracts and complaints | What liabilities and continuity requirements need attention? |
| Transaction structure | Debt, tax, disputes and required approval documents | Which exposures would the buyer assume? |
Check ownership, permitted use and transfer conditions
Reconcile property identifiers and boundaries across title records, plans and the proposed sale agreement. Confirm whether parking, access routes, loading areas and shared facilities are included, separately owned or dependent on third-party rights. The area shown in marketing materials should not automatically be treated as transferable or lettable space.
Where a mortgage, restriction or consent requirement exists, identify the release or approval process and the evidence required at completion. Investigate disputes, third-party interests and the effect of a sale or change of control on material contracts. Do not assume an arrangement used in one country is enforceable in another. A fundamental uncertainty about ownership or lawful use may need resolution before the transaction can proceed, even if the seller offers a discount.
Test the tenancy schedule and quality of income
Reconcile the rent roll to signed agreements
Check material entries against executed leases and all amendments. Capture commencement, expiry and break dates separately, together with rent reviews, turnover rent, rent-free periods, service-charge terms and landlord works. Record the amount, validity and transfer arrangements for deposits and guarantees. Anchor-tenant provisions may affect other leases, including conditions linked to occupancy or the continued operation of another store.
Leased area, stores open for trading and tenants paying on time measure different things. State the denominator used for each occupancy measure. Assess footfall, tenant sales and competing retail destinations using consistent periods and documented data sources. A busy inspection day cannot establish year-round trading strength. Check that areas use consistent measurement conventions before comparing rent per square foot or square metre.
Separate billed income, cash receipts and recurring performance
Reconcile charges, bank receipts and aged debt over the same period. Identify one-off income, incentives, bad debts and service costs retained by the owner. Explain the adjustments behind reported net operating income, or NOI. Track debt service and major replacement expenditure separately in the cash-flow model. A refundable tenant deposit is not ordinary rental income.
The records used for real estate financial reporting can provide a starting point for this reconciliation. Management reports still need supporting evidence. Where a tenancy contributes a large share of income, consider the effect of a break option, non-payment or reletting period on the acquisition assumptions.
Connect technical findings to an achievable capital plan
Competent specialists should assess the building, roof, envelope, mechanical and electrical systems, fire safety, accessibility and maintenance history within the agreed scope. A visual inspection does not establish structural or seismic performance. Record inaccessible areas, assumptions and further tests required. Urgent safety concerns should reach the responsible party promptly, rather than wait for the final transaction report.
For replacement works, consider cost, timing, procurement and disruption to trading. Review historic site use, potential contamination, flood exposure, energy records and relevant environmental permissions with suitable specialists. Useful methodological references include the RICS technical due diligence standard and IFC's environmental and social risk framework. These references do not imply that MG holds a particular accreditation or that every transaction is subject to those frameworks.
Turn findings into a documented acquisition decision
For every material issue, record the evidence, remaining uncertainty, possible income or cost effect, responsible person, deadline and closure test. For example, a forecast may assume full rent while a signed side letter grants a temporary rent-free period. The lease summary, income forecast and cash plan must then be reconciled. This is a hypothetical illustration, not an MG transaction or an investment return calculation.
| Finding | Action to consider | Evidence for the decision |
|---|---|---|
| Title or permitted use remains unclear | Extend legal review; make completion conditional or defer it | Specialist confirmation and the relevant records |
| Rent roll conflicts with a signed amendment | Correct the income forecast and review valuation implications | Executed document and reconciled income schedule |
| Major equipment needs replacement | Prepare an independent scope, budget and delivery programme | Defined quotation and trading-disruption assessment |
| Essential evidence is missing | Keep the item open and request further verification | Explicit unverified status until evidence arrives |
Price adjustments, remedial commitments, security or retention arrangements need transaction-specific legal and tax review. Avoid counting the same exposure twice through both the income model and a separate price adjustment. The decision file should also explain when an unresolved risk falls outside the buyer's acceptance criteria.
Prepare for completion and operational handover
Refresh material findings between signing and completion. Recheck new leases, liabilities, incidents and changes to agreed remedies. Document rent and expense apportionments, deposits, guarantees, keys, system access and contract delivery. Assign owners and follow-up dates to open actions so that commercial asset management begins with verified information.
MG Global Partner's consulting on shopping malls for sale and acquisition can help coordinate the asset brief, available information and specialist workstreams. Define each expert's responsibility at the outset and consolidate the findings into a decision file that the investor can review.
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