THE ROLE OF THE TECHNICAL DUE DILIGENCE PROCESS AT THE STAGE OF LAND ACQUISITION FOR CONSTRUCTION INVESTMENT

The process of planning the implementation of a construction investment is usually preceded by a decision on the purchase of land property, which in turn is typically accompanied by a process known as technical due diligence (TDD). During this process, the feasibility of the planned construction project is verified. The preliminary design concept of the building, prepared at the request of the buyer – a potential investor, is analysed in detail. Legal, technical, environmental, social, or economic obstacles that may prevent the planned investment may already be apparent at the stage of issuing the early finding TDD report. In such cases, purchase negotiations are then typically broken off immediately. In the absence of such obstacles, a final TDD report is issued, containing recommendations for the implementation of the project. There is a lack of research in the scientific literature on the preparation of TDD reports for land properties. This article develops a proprietary algorithm for the TDD process based on the authors’ professional experience and interviews with experts. This algorithm is adapted to the TDD process for land property acquisition. The purchase of a plot of land, along with the preparation of a TDD report, marks the initial step in the planning process for construction investment, which can significantly impact its success.