TDD assignment for international acquisition projects V4.

Technical Due Diligence Assignment For

International Acquisition Projects

Project Name: JDP Project Towers

Project Location: Indonesia

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 TDD assignment for international acquisition projects V4.0

1．Project overview

1.1 Project Name：JD Project Towers

1.2 Project Location：Indonesia

1.3 Project Scale

No. Asset Name Asset Address Land Area(m2) GFA(m2) NLA(m2) Asset Status

Metrolink Medan Satria,

1 276,404 193,6761 Operating
Logistics Hub Bekasi
Cileungsi
2 Distribution Cileungsi, Bogor 54,561 53,914 Operating
Centre

35,987 32,130 Operating

Cibitung Logistics
3 Cibitung, Bekasi
Hub
121,156 Land

Cikarang Logistics 53,012 51,283 Operating

4 Cikarang, Bekas
Park 159,284 Land

Note - 1. Consist of GLA of 38,805 sqm meant for Metrolink Logistics Hub 4 which is currently under development and
expected to obtain SLF by Q3 2023

1.4 Brief Introduction of Project Background：

The portfolio contains 4 operating industrial assets with a total NLA of around 330,000 sqm and 2 land banks with entire
land areas of about 280,000 sqm. Over 85% of the portfolio occupied area is by e-commerce, 3PL, and data center
tenants, who are expected to continue growing at a rapid pace.
Metrolink Logistics Hub: A built-up large-scale, three-story modern logistics ramp warehouse. An additional 38,805 sqm
logistics currently under development and this expansion is expected to obtain SLF by Q3 2023. And a built-up data
center.
Cileungsi Distribution Centre: A large-scale, modern two-story logistics ramp warehouse.
Cibitung Logistics Hub & Cikarang Logistics Park: These are large-scale modern logistics warehouses.
Cibitung Land & Cikarang Land: These are land banks with promising prospects for future development.

2. Time requirement
The due diligence consultant is required to make a detailed work plan while meeting the following time
requirements:
2.1 TDD kickoff: according to the notice email of JD’s responsible person.
2.2 Two weeks from the kickoff, submit a preliminary achievement of High Risk findings, including but not

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limited to: red flag report, list of deficiencies (including capex) and building information overview table.
2.3 Three weeks from the work kickoff: submit draft DD report for JD review and comments, including a soil
investigation/topo survey progress report.
2.4 Six weeks from the work kickoff: Submit final technical due diligence achievement, including final soil
investigation/topo survey report.
2.5 Provide consulting services related to the due diligence content of the Project until the negotiation
completed.
2.6 Please keep close communication with JD’s responsible person and adjust the schedule in time after
obtaining the consent of JD’s responsible person according to his requirements and actual situation.
Meanwhile for optional services, the completion dates shall be subject to further alignment with JD’s
responsible person.

3. Scope of TDD Work

Technical, Environmental & ESG Due Diligence
Condition review of asset including

In general, the following topics should be worked through as part of the DD report:
- One-time review and evaluation of documents provided (digital data room) and publicly available information.
- Review of the historical use of the property and the surrounding area.
- Examination of the available information with regard to possible encumbrances on the property and the
immediate surroundings.
- Examination of the available information regarding the composition and strength of the soil of the property in
question and associated risks.
- Report preparation for the assessment of environmental risks (building pollutants, contaminated sites) in English
- Compilation of a red flag list with monetary assessment or, if not assessable in monetary terms, with possible
solutions and necessary measures in connection with the risks identified and mentioned in the report.

Part A Existing building

3.1 Technical, & Environmental Due Diligence

The scope of services required to be provided for the acquisition consists of the following items:

• A review of the Technical and Environmental Vendor Due Diligence reports - if any - and further information
provided in the data room and provision of key red flags based on these reports

• A comprehensive red flag Technical & Environmental due diligence with general information on the key risks,
recommendations and associated costs on the elements listed below in paragraph 4. With during and throughout
the process an immediate update on any material findings.
• A market practice, full due diligence report (and executive summary) with detailed information (incl. photo
documentation) on all risks, recommendations and associated costs;

• Measurement certificates and leased sqm investigations (or review of existing reports);
• Any detailed separate reports where necessary and agreed (f.e. asbestos, fire safety);

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• A 10-year annual capex and maintenance forecast (capex shall refers to the coming requirements of
EPC/BREEAM/other sustainability upgrading, f.e in 2030 or later)

• Interfacing and communicating with JD legal DD teams on key issues if relevant.

• Explain and answer queries about TDD report in detail. Provide consultation and negotiation advice/comments on
matters related to the project prior to the completion of the transaction.

• Provide reliance letter to 3rd party lenders and investors if needed.

The scope of services to be provided is described in general and not limited to the items as referred to in the Scope of
Works.

3.2 Scope of Works / Proposal

General

1. Documentation
a. Full assessment of all relevant documents (not limited to the availability in the data room, i.e. pro-
actively obtain relevant documents at the municipality, authorities and other relevant parties)
b. Review the status of major licenses/approvals/certificates issued by government agencies and make a
list. Assessment of compliance and corresponding risks in light of town/urban planning, relevant
building regulations, fire regulations, etc.
c. Review project maintenance contracts and project completion documents etc. Assess risks in terms of
scope of construction, warranties/guarantees, warranty period, payment status, etc.

Technical Due Diligence

1. Condition of the asset(s)

Site visits with full technical inspection, inspecting general conditions of the building including (but not limited to):
a. Internal / external condition of the building, construction, and roof works
b. Site area (pavement, perimeters, etc.) – including share of non-vegetated surface area (as % of land
plot)
c. Mechanical & Electrical installation (including detailed description (capacity), service, maintenance
and obsolescence of refrigerant gases in air conditioning systems)
d. Security and access
e. Utility connections (include status and reserve situation)
f. Details of any on-site low carbon / renewable technology
g. Details of Building Management System
h. Details of Building Information Model (if exists)
i. Review warranties / guarantee agreements
j. Monitoring of indoor environmental quality
k. Technical issues from agreements/lease agreements (incl. interaction with legal advisors)
l. Flexibility of the construction (alternative use, multi-tenant possibilities)
m. List the brand and model and warranty period of main building materials, building parts, major
mechanical and electrical equipment and facilities and evaluate the grade/level according to local
market. (optional & if available)

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n. Any further cladding/wall/roofing expert inspection (if applicable).
o. Further floor expert examination in road and parking ground and slab (if applicable). Identify ground
sinking and identify concrete floor cracks / defect, advice mitigation measures.
2. Compliance (incl. interaction with legal advisors)
a. Zoning plan
b. Building permits for general construction and modified building permits if applicable
c. Building permits for fit-out works and modified building permits if applicable
d. Compliant and risky building fabrics
e. Occupancy certificates / user permits
f. Consistency between actual situation and as-built drawings (including changes) or approved
drawings, specifications, standards and contracts
g. Fire safety regulations – full scan of compliance with applicable regulations (fire alarm, fire
precaution, fire compartments, escape routes, etc.)
h. Other relevant regulations such as ICPE, disabled person access, etc.
3. Capex forecast
a. Back-log that needs to be addressed in the short-term – if any
b. Review the status of the project (ongoing and completed) contract cost plan, including actual spends,
outstanding payments and commitments (if any).
c. Based on the review/evaluation opinions mentioned by previous sections, in conjunction with the
lease and related contracts/agreements, indicate the costs of repair/rectification/maintenance works
and the responsible parties (Tenant or Seller or Buyer or other parties), and propose what
repair/rectification/maintenance works need to be completed by the Seller before the delivery.
d. 10-year annual capex and maintenance plan with breakdown for backlog (1y CAPEX / 2-5Y CAPEX / 6-
10Y CAPEX)
e. Including ESG compliance works (green certificate) or opportunities to make the building services even
more sustainable (lighting, HVAC, BMS, solar panels, electrical stations, water etc)
f. Provide reinstatement cost assessment report. Including elemental analysis
g. Landlord obligations
h. Review of current maintenance programs
4. Measurement surveys
a. Review and / or obtain measurement certificates and provide comparison with leased sqm (incl.
interaction with legal advisors)

b. Step 1：Review the area measurement survey provided by vendor and as-built drawings, extract and

list the GFA, GIA/NLA of each partition/compartment, and enclose the according plan.
c. Review the on-site condition and ensure dimensions are aligned with the approved drawings. Any
deviation and associated risks to be reported.

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d. Step 2：(Optional) only if Step 1. provides insufficient area data, carry out area measurement by a

registered surveyor, list the GFA, and GIA/NLA of each partition/compartment in detail, and form a
measurement report/certificate.
5. Property Management
a. Review maintenance contracts – if any - and provide OPEX forecasts (incl. potential savings)
b. Review service charge forecasts
c. Meet current property / facility manager and maintenance suppliers to gain full understanding of
current maintenance situation (if not present at site visit)
6. Green building certification
a. If the asset(s) to be acquired already has/have green building certification gather all required
information the certification is based on:
b. Assess if the green building certification is valid and estimate the required capital expenditure to
recertify the asset(s):
c. Pre-assessment of green building certification (e.g. BREEAM (part 1&2), LEED or other certificate);
i. What would the BREEAM score be if the asset was to be certified
ii. How much would it cost to get to higher levels and on what items
iii. A breakdown of each improvement measure, their associated cost and by how much each
one would increase the overall BREEAM rating.

Estimate the required capital expenditure to improve green building certification to the next level within the
certification.

Environmental Due Diligence

1. Full environmental assessment (includes but not limited to:)

a. Pollution and contamination, including:
i. Soil
ii. Groundwater
iii. Air emissions
iv. Noise
v. Vibrations
vi. Location of waste removal site
b. Storage and handling of hazardous substances / materials
c. Water supply and collection / disposal of waste waters
d. Asbestos containing materials (if applicable)
e. Historical use of the property and surrounding area
f. Geological risks. Check if the asset is in the fault zone
g. Review whether there are potential risks like railway impact, river, HV corridor, military facilities
outside the red line (site).

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2. Compliance (incl. interaction with legal advisors)
a. Local and national regulations (incl. health & safety)
b. Protected areas (incl. water scarce areas and greenfield land of recognized high biodiversity value /
serves as habitat of endangered species)
c. Remediation orders

Part B Greenfield

a）Feasibility Study

Background: The subject areas for the TDD advice include in particular examine restrictions due to building planning law
/ building regulations law (f.e. noise quotas, GRZ / GFZ, etc.), location (adjacent areas, traffic connections), development,
costs, deadlines, identify possible risks and make recommendations for minimizing the risks, through further
investigations, provision of further documents or consideration in the purchase agreement. Zoning and Town-Planning:
o Review of documents relating to building planning law and building regulations such as development plans,
land use plans, application time etc. with regard to effects, restrictions and risks for the project development
o Assess any town-planning variants that need to be implemented in order to construct a grade A logistics
warehouse. Review of possible restrictions due to other legal requirements such as GEG (emissions), noise
protection, accessibility, construction area ratio limited, building height limited etc. And comments on the
achievability of the variants
o Provide relevant information about land use planning as follows:
1.1 Regional land use planning

1.2 Project planning conditions/constraints

List of local planning conditions/requirements this project design shall comply with, including
but not limited to:
a. GFA
b. building setbacks
c. Building ratio
d. Green ratio
e. Density
f. Quantity and location of entrances
g. Parking space
h. Building style preference and aboveground and underground space requirements.
i. Civil defense
1.3 Land Property Lines (preliminary or final if available), need CAD version.

1.5 Local building codes/regulations

1.6 The main requirements of local codes, including but not limited to the maximum floor area of a single
warehouse, the maximum floor area of a single fire compartmentation zone, building fire resistance
classification requirements, minimum distance between buildings for fire compliance, width of fire
escape, etc.

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• Public utilities:
o Identify all utilities’ current conditions and technical parameters and application procedures to obtain
consents from authorities and map out the routes of all utilities connected to the site on a google map/bird
view.
o Potential costs for upgrading the utilities f.e. a new substation.
o Review of possible restrictions resulting from the location of the property, in particular with regard to
neighboring areas and transport connections using public online portals and existing expert reports
• Licenses and Approvals:
o Flow steps to indicate the full process from land acquisition/transfer, environmental/traffic impact approval,
design statutory submissions to building permit (foundation and up-structure), completion acceptance and
operation permit and so forth. For each step, please provide a list of materials/documents request to be
ready and normal duration.
o Map out the whole application procedures for public utilities including but not limited to access to road,
green, water supply, LPG and power supply, gas and telecom etc.
o Detail list of all costs and expenses which are charged by authorities and utility providers.
• Program of construction/development
o Estimate the whole development program/timeline, including pre-development, design, construction,
project completion, and contingency and processing time required for obtaining
approvals/permits/certificates with regard to feasibility and risks
o Consider using a Gantt chart to simulate the timing of each key milestone.
• Construction cost
o Provide your best construction cost estimate based on the GFA and the local construction cost per m2 for
the latest logistics project.
• ESG assessment and EPC/BREAAM/others certification analysis
o Provide a advice description of technical features of the new warehouse asset that will allow to obtain
EPC/BREEAM/or other certifications (Gold and Platinum or Grade A or excellent level)
o Provide a risk assessment regarding potential changes in criteria used by ESG/Green certifications and assess
how the development project can be rendered future-proof by including “new technologies” in the building
design

b）Environmental Due Diligence

• 1. Full non-intrusive environmental assessment based on environmental document/survey in the data room
and from other sources (includes but not limited to:)
o a. Pollution and contamination, including:
i. Soil
ii. Groundwater
iii. Air emissions
iv. Noise

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v. Vibrations
vi. Location of waste removal site
o b. Storage and handling of hazardous substances / materials
o c. Water supply and collection / disposal of waste waters
o d. Asbestos containing materials (if applicable)
o e. Historical use of the property and surrounding area
o f. Geological risks. Check if the asset is in the fault zone
o g. flood risks and aspect of the further development
o g. Review whether there are potential risks like railway impact, river, HV corridor, military facilities outside/
surrounding the red line (site).
• 2. Compliance (incl. interaction with legal advisors)
o a. Local and national regulations (incl. health & safety)
o b. Protected areas (incl. water scarce areas and greenfield land of recognized high biodiversity value / serves
as habitat of endangered species)
o c. Remediation orders

c）Soil investigation (Only for Cikarang greenfield)

o Desk top study on geo-investigation survey from the data room and other sources.
o Intrusive investigation
Drilling and pile-driven core samplings for the greenfield development plot.

- Execution and evaluation (incl. preparation) of 4 to 7 Deep boring/drillings, plus 10 Dutch Cone
Penetration Test all position of testing and sampling have to discuss with Client prior to execution. Identify
the type, depth, distribution, and physical and mechanical properties of the rock and soil layers; Analyze and
evaluate the stability and uniformity of the site and foundation, provide geotechnical parameters and
foundation bearing capacity indicators that meet the design and construction requirements; And provide
calculation parameters for foundation deformation and predict the deformation characteristics of buildings.
- Evaluate and determine the soil type of the site, conduct seismic effect evaluation of the site and foundation,
and assess the liquefaction of saturated soil, clay, sandy soil, and silt, identify the presence of liquefiable strata,
point out their degree of harm to the site or foundation, and propose treatment plan suggestions.
- Identify the geotechnical parameters, burial depth, foundation treatment, and settlement analysis required for
foundation design, as well as the calculation parameters and precautions to be taken, and evaluate the
feasibility of the proposed foundation type for each individual unit. If the foundation conditions determine the
need to use pile foundations, it is necessary to propose which type of pile foundation to use, its corresponding
pile diameter size, the situation of the pile end bearing layer, etc., and propose the ultimate bearing capacity
of a single pile and calculation formula. Specific treatment plans and calculation indicators should be provided
for foundation treatment.
o Survey layout drawings need to be provided, and on-site surveys can only be conducted after being reviewed
by Party A. The location and depth of survey holes need to be reviewed by Party A.
d) Topo survey (For both Cibitung and Cikarang greedfield)
Identification of property boundaries to establish the survey area
- Land area measurement
- Mapping out of the site according to a red line diagram

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- Establishing control points with coordinates
- Survey of land elevation points
- Produce contour line drawings
- Calculate earthwork backfill or cut volume
- Obstacle Documentation

4. Deliverable Requirement
4.1 The technical due diligence deliverables must cover the above work scope (Except for explicitly excluded

items）, the content of the deliverables/achievement/report should be accurate, detailed and easy to understand,

especially the description of the property situation, risk content and possible consequences/impacts.
4.2 The sources of information obtained during the investigation must be authoritative and valid, and the
relevant investigation questionnaire, mail, policy documents, reports, etc. need to be attached to the electronic
version of the TDD report.
4.3 Final TDD deliverables include but are not limited to:
4.3.1 Red flag report

4.3.2 TDD report（All risks need to be graded）[Sample report should be submitted at the bidding stage to

clarify the depth of investigation and review]

4.3.3 Complete Annex " Technical due diligence risk assessment opinion table " (the content must be filled in
according to the major items in the form, and the content of the sub-items can be adjusted)
4.3.4 Certificate/approval/license and materials list. content requirements: 1) List the names of all certificates,
approvals, permits, test reports and other documents involved in the whole development cycle (from land
acquisition to asset operation); 2) Clearly indicate the status of each document; 3) Specify the responsible party
for each document; 4) Annotate and comment on documents that may adversely affect the acquisition.
4.3.5 Original on-site image data (include aerial video – if applicable)
4.3.6 Relevant government policy/regulation documents
4.3.7 Various Q&A forms/tables, and the tables required by Party A (JDP)
4.3.8 Reply from the authorities or government department
4.4 The content of communication and feedback with us (JDP), as well as the content of TDD report, the
language should be in English.
4.5 After Party A (JDP) issues the review opinions/comments on the TDD report, the due diligence consultant
shall complete the revise and reply within 48 hours. Provide advice/comments to the issues related to the project
prior to the completion of the transaction.
4.6 The electronic version of TDD report and attachments shall include two versions (content must be same),
one is the editable version (word and PDF) and the other is the scanned version with stamp/signature.

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The final interpretation of TDD tasks/assignments and requirements belongs to

JD International Development Management Department

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