An Example Due Diligence Report by LDC. This report provides a comprehensive analysis on the performance of assets for a potential acquisition. The analysis is created by a combination of extensive demographics profiling, retail occupancy and SWOT analysis over time.

1. 1
Town X
LDC
2016
Overview of the retail market in Town X

2. 2
Brief
Aim:
• To define the catchment population
• Assess the historical vacancy rate and other useful retail performance metrics
within Town X and the wider catchment area
• Understand the occupier market in Town X
• Develop a target list of potential occupiers, who could be attracted to Town X
based on the catchment profile, GAP analysis and fastest growing retailers
• Comparative study of the competing retail locations within the catchment

3. 3
DEMOGRAPHICS

4. 4
• Majority of the population (57%)
is made up of Urbanites and
Suburbanites.
• High percentage of the
catchment consists of Urban
Professionals and Families (25%)
& Semi-detached suburbia (21%).
• This segment of the population
have above average earnings,
high qualifications and live in
private rented or privately
owned households.
Area X Catchment profile
158
3,496
13,318
15,971
16,272
53,146
55,998
81,506
0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000
Rural Residents
Cosmopolitans
Constrained City Dwellers
Ethnicity Central
Hard-Pressed Living
Mul cultural Metropolitans
Suburbanites
Urbanites
Popula on
5,594
5,715
6,173
9,908
10,364
12,057
22,087
41,089
50,404
59,419
0 10000 20000 30000 40000 50000 60000 70000
Suburban Achievers
Ethnic Family Life
Ethnic Dynamics
Migra on and Churn
Challenged Diversity
Asian Traits
Ageing Urban Living
Rented Family Living
Semi-Detached Suburbia
Urban Professionals and Families
Popula on

5. 5
• Population: 234,000 (34% of Area X)
• This demographic group are most likely to be located in urban areas in
southern England.
• Likely to live in either flats or terraces, and to privately rent than own their
homes.
• Unemployment in these areas is below the GB average.
• Those in employment are most likely to work in financial, public
administration and education related sectors.
Urbanites

6. 6
• Population: 160,358 (23.3% of Area X)
• This demographic group live on the outskirts of urban areas.
• Population tends to be a mixture of above retirement age families or middle aged
families with school age children.
• Level of qualifications are slightly above the GB average with the majority
employed in the IT, financial, public administration or education sector.
• These households have a high proportion of people who use private transport to
commute in to work.
• A large proportion of the catchment population in this group live in semi-detached
properties and the residents are considered to be ageing (50+ years old).
Suburbanites

7. 7
• Urbanities and Suburbanites spend above the GB average on Clothing and
footwear, Restaurants, and convenience (Food and non-alcoholic drink).
Average weekly expenditure (£) by catchment profile
0.00
20.00
40.00
60.00
80.00
100.00
120.00
Food
and
non-alcoholicdrinks
Alcoholicdrinks,tobacco
and
narco
csClothingand
footw
ear
Housing(net)2,fueland
pow
er
Household
goodsand
services
Health
Transport
Com
m
unica
onRecrea
on
and
culture
Educa
onRestaurantsand
hotels
M
iscellaneousgoodsand
services
Averageweeklyhouseholdexpenditure(£)
Urbanites
Suburbanites
GB average

8. 8
• Internet penetration rates are the lowest in
Borough X is 81.2%.
• This means fewer people are likely to adopt
online shopping in this borough, when
compared to the rest of London.
• This makes the town centre more resilient
to the threat of online shopping and click &
collect.
• This will have a positive influence on the
footfall within Town X town centre.
Internet penetration rates
78.0 80.0 82.0 84.0 86.0 88.0 90.0 92.0 94.0 96.0 98.0 100.0
Bexley
Haringey
Hounslow
Islington
Camden
Havering
Waltham Forest
Harrow
Bromley
Barking and Dagenham
Ealing
Hackney
Lewisham
Merton
Greenwich
Hammersmith and Fulham
Southwark
Tower Hamlets
Brent
Barnet
Su on
Westminster
Hillingdon
Croydon
Enfield
Newham
Wandsworth
Kingston upon Thames
Richmond upon Thames
Redbridge
Lambeth
Kensington and Chelsea
Internet penetra on rate (%)

9. 9
• Balanced daytime population with
fewer in-bound and outbound
commuters than other London
boroughs.
• Therefore, this means there will be
consistent trading throughout the
weekdays and weekend.
• Multiple shopper journeys will be
covered, so increased opportunity
for incidental spend.
Population vs. Daytime population
-70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30%
Lewisham
Wandsworth
Haringey
Redbridge
Waltham Forest
Harrow
Bexley
Croydon
Merton
Su on
Greenwich
Bromley
Barnet
Barking and Dagenham
Havering
Newham
Richmond upon Thames
Lambeth
Enfield
Brent
Ealing
Hackney
Kingston upon Thames
Hounslow
Hillingdon
Southwark
Hammersmith and Fulham
Islington
Kensington and Chelsea
Tower Hamlets
Camden
Percentage difference between working and census popula on

10. 10
• The house price to earnings ratio is an
important indicator of housing
affordability.
• This is key to understanding how much
of a catchments earnings are lost to
paying rent or interest on mortgages.
This is key for London, where earnings
may be skewed.
• Borough X has an average house price to
earnings ratio across London boroughs.
This means that rents and mortgage
payments will not have a significant
impact on the catchments spending
ability.
House prices to earnings ratio
0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0
Camden
Hammersmith and Fulham
Islington
Hackney
Richmond upon Thames
Lambeth
Wandsworth
Haringey
Brent
Ealing
Barnet
Harrow
Southwark
Waltham Forest
Kingston upon Thames
Merton
Hounslow
Greenwich
Tower Hamlets
Lewisham
Hillingdon
Enfield
Newham
Bromley
Su on
Redbridge
Croydon
Havering
Barking and Dagenham
Bexley
House prices to earnings ra o

11. 11
RETAIL ENVIRONMENT

12. 12
Current vacancy rate analysis
• Town X’s vacancy rate dropped by -1.8% in the last 12 months
• The town centre vacancy rate is below the GB average of 11.5%
• The retail vacancy rate (excludes leisure units) is 12.8%, +0.1% above the GB average
• The leisure vacancy rate is 4.3%, significantly below the GB average of 8.2%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
14.0%
16.0%
Retail & Leisure Retail (Shops) Leisure
Vacancyrate
2014
2015

13. 13
Historical retail vacancy rate analysis
• Vacancy rates calculate the
number of vacant units as a
percentage of total units.
• Shopping centre in Town X has
historically had a retail vacancy
rate, which is below the GB
shopping centre average.
• This shows the shopping centre
has been successful in retaining its
occupiers. 0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2011
H2
2012
H1
2012
H2
2013
H1
2013
H2
2014
H1
2014
H2
2015
H1
2015
H2
Vacancyrate(%)
GB (shopping centre)
Shopping centre in Town X

14. 14
Persistent vacancy rate analysis
• Persistent vacancy measures the
number of units vacant for more
than three years.
• Shopping centre in Town X
performs above the GB average for
shopping centres.
• 2.9% of the total units have been
vacant for more than three years,
below the GB average for
shopping centres of 4.3%. 5.2
3.0
1.7
4.3
2.9
1.4
2.9
2.9
0.0 1.0 2.0 3.0 4.0 5.0 6.0
Less than 1 year
1-2 years
2-3 years
More than 3 years
Percentage of total units
Shopping centre in Town X
GB (shopping centre average)

15. 15
Retail offer
• Comparing the retail offer in Town X to
the rest of the South East, we can see
what categories have a under and over
supply in the catchment.
• Notable undersupply of Convenience
stores due to the presence of
discounters and ASDA superstore in
close proximity.
• Fashion shops have an undersupply
within the area, which gives an
opportunity for potential new occupiers
to tap into the unsaturated market.
-4.52%
-1.48%
-1.34%
-1.23%
-0.85%
-0.65%
-0.57%
-0.50%
-0.48%
-0.43%
-0.43%
-0.42%
-0.32%
-5.00% -4.50% -4.00% -3.50% -3.00% -2.50% -2.00% -1.50% -1.00% -0.50% 0.00%
Convenience Stores
Barbers
Newsagents
Chemists / Toiletries
Den sts
Printers
Delicatessen
Health Clubs
Shoe Repairs
Bakers Shops
Hairdressers
Bureaux de Change
Fashion Shops
Variance with Greater London
0.82%
0.85%
0.85%
1.00%
1.10%
1.52%
1.81%
2.25%
2.65%
3.89%
0.00% 0.50% 1.00% 1.50% 2.00% 2.50% 3.00% 3.50% 4.00% 4.50%
Department Stores
Discount Store
Toy Shops
Hearing Aids
Household Stores
Shoe Shops
Banks & Other Financial Ins tu ons
Jewellers
Beauty Products
Mobile Phones
Variance with Greater London

16. 16
Retailer GAP analysis
• GAP analysis was carried out to see the retail and leisure occupiers present in
similar locations, but missing in Town X.
• The comparable locations were: Town X1, Town X2 and Town X3

17. 17
Competing centres- Vacancy rates
• Bluewater, Broadway Shopping centre, Erith Riverside and Intu Lakeside shopping centres
have historically had vacancy rates, which are below the GB shopping centre average.
• This shows that all the shopping centres are able to attract and retain occupiers within a
competitive environment.
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
16.0
18.0
2011 H2 2012 H1 2012 H2 2013 H1 2013 H2 2014 H1 2014 H2 2015 H1 2015 H2
Vacancyrate(%)
GB (shopping centre)
Broadway Shopping Centre Bexleyheath
Bluewater Shopping Centre
Erith Riverside Shopping Centre
Intu Lakeside (Lakeside Shopping Centre)

18. 18
Competing centres- Persistent vacancy
• Bluewater, Erith Riverside and Intu Lakeside have low levels of persistent vacancy (units
vacant for over three years).
• All the competing shopping centres have managed their vacant units effectively, which
shows that the Broadway Shopping centre has remained an attractive centre for both
occupiers and the local catchment.
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Less than 1 year 1-2 years 2-3 years More than 3 years
Percentagetotalunits(%)
GB (shopping centre)
Broadway Shopping Centre Bexleyheath
Bluewater Shopping Centre
Erith Riverside Shopping Centre
Intu Lakeside (Lakeside Shopping Centre)

19. 19
Strengths
• Strong local retail offer with a department
store anchor and affordable convenience retail
to attract the local catchment.
• A large proportion of the catchment population
are urban professionals and families, so they
have higher than average spend per head.
• Minimal threat from the competing centres as
shown by the low vacancy and persistent
vacancy, making it a dominant centre.
Weaknesses
• Find new occupiers for units previously
occupied by a Shoe shop, Gift shop and Toy
company.
SWOT Analysis- Town X
Opportunities
• Low levels of internet penetration
rates means the town centre will be
more resilient to online shopping.
• List of potential occupiers who could
improve the tenant mix and which
have a similar customer segment to
the catchment.
Threats
• Redevelopment at Intu Lakeside is in
the pipeline with 438,000 sq. ft. of
additional space.

20. 20
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