Project Workout of Failed & Incomplete Projects
- Following the failure of a developer to complete a project the controlling financial institution will make a decision based on the financial status of the project whether to proceed with and develop the project or alternatively to either hold it, requiring temporary securing, weather-proofing, moth-balling, etc. works to the property and buildings, or to dispose of it. That decision will be based on advice from Chartered Valuation Surveyors and Chartered Quantity Surveyors in relation to expected revenue and cost-to-complete estimates.
- Where a decision has been taken to develop the stalled project, an in-depth Strategic Review Report setting out the roadmap for the development will be required to examine the project in detail including the status of design and planning permission documentation, of utilities, of Design Team appointments, of the main construction contract, of sub-contracts, of payments and outstanding monies, of warranties, of insurances, etc., undertaking site inspections and surveys and preparing an initial project feasibility assessment. It is usual also to include a Workout Strategy Report encompassing Project Feasibility Analysis, review of the Development Company and existing Design Team, review of status of existing contracts and sub-contracts and/or recommendation for appointment of new contractors, review of funding and cash flow, etc.
- The Strategic Review Report is important as each project is different and will have its own individual requirements.
- As Chartered Quantity Surveyors, we are ideally suited to support preparation of the Strategic Review and Workout Strategy Reports having the requisite Project Management skill sets alongside expertise in the area of Construction Law, Procurement, Cost (both construction and indirect costs), Design and the practical know-how to successfully execute a development workout.