Policy Real Estate Acquisition Permanent Procedure

Real Estate Acquisition Permanent Procedure

Intent

This Procedure sets out the process to be followed to purchase a real property interest of a freehold asset whereby title transfers to James Cook University (JCU; the University).

Scope

This Procedure applies to all staff, students, consultants and contractors representing JCU Australia in the acquisition of Real Estate interest of a freehold asset.

This procedure does not apply to JCU Brisbane or JCU Singapore.

This Procedure does not apply to the acquisition of Real Estate via lease – refer to the Real Estate Acquisition Term (Lease) Procedure.

Definitions

Except as otherwise specified in this procedure, the meaning of terms used in this Procedure are as per the Real Estate Dealings Policy and the Policy Glossary.

Introduction

To fulfill its strategic objectives to serve regional and remote Queensland, the University requires a diverse Real Estate portfolio across the State. The University’s Real Estate portfolio ranges from residential houses and apartments to commercial buildings and land. From time to time the range and location of Real Estate within the portfolio will change, requiring an Authorised Person (AP) to acquire or dispose of Real Estate.

This procedure sets out the process and steps to take to ensure the University acquires the correct Real Estate in response to the University’s strategic plans and objectives, for the right price, relevant to its needs and the greater market conditions, and in the correct geographical location. For example, when JCU purchases property for student accommodation, this procedure and policy apply in full. For the avoidance of doubt, the source of the finance which pertinent to the Acquisition of Real Estate is irrelevant and the policy and procedure apply.

Procedure

Permanent Acquisition is set out below in three stages;

Stage 1 – Preliminary investigation;
Stage 2 – Going to market; and
Stage 3 – Due Diligence;

To provide further direction and clarity, each stage is expanded further into a series of steps as detailed below.

The steps also identify what actions will occur, how it will be processed and who is responsible for the execution, including:

Actions;
Responsible officer;
Timing; and
Sequence.

Some actions may overlap rather than run consecutively. The timings shown are indicative and should only be used as a guide.

Acquisition Stage 1 – Preliminary investigations

A key outcome of this stage is ensuring that new Real Estate is correctly briefed, is required and if so, seek approval to proceed to stage 2.

Note – the Client is not permitted to make any enquiries with any third party, agent, agency, developer, or anyone other than the AP.

Step	Action	Responsible Officer	Timing
1.1	Client identifies a need and submits a Real Estate Request Form to Manager, Leasing and Commercial Portfolio.	Client
1.2	Acting as the AP, the request is evaluated and compared to existing property portfolio. Consultation occurs with internal parties including Space Team. Meeting arranged with Client.	Manager, Leasing and Commercial Portfolio	3 weeks
1.3	If the AP determines that new Real Estate is required, the Client completes a Preliminary Acquisition Checklist.	Client	2 weeks
1.4	AP reviews Checklist and produces a Draft Acquisition Plan. The Plan is shared with the Client.	Manager, Leasing and Commercial Portfolio	3 weeks
1.5	AP does a final check of the existing Real Estate Portfolio and if negative, then a market scan is undertaken to broadly identify capacity and budget requirements.	Manager, Leasing and Commercial Portfolio	1 week
1.6	If the new Real Estate is not already approved through the Annual Report to Estate Advisory Committee, the Client submits a Business Case to University Executive.	Client	3 weeks
1.7	If the Acquisition is approved – AP goes to market. If the Acquisition is declined – AP closes file.	Manager, Leasing and Commercial Portfolio	1 week
1.8	Inform JCU stakeholders, Client, Legal, Procurement, and Estate of the status.	Manager, Leasing and Commercial Portfolio	1 week

Acquisition Stage 2 – Going to Market

The key outcome of stage 2 is to identify the most appropriate Real Estate, negotiating suitable terms and executing the contract of sale. The contract shall be subject to stage 3, due diligence.

Step	Action	Responsible Officer	Timing
2.1	Investigate marketplace, consult with agents and owners, negotiate acceptable terms for the contract of sale. The terms must include the JCU special conditions.	Manager, Leasing and Commercial Portfolio	6 weeks
2.2	JCU Legal and external lawyers review the contract and confirm it is OK to proceed.	Manager, Leasing and Commercial Portfolio	2 weeks
2.3	Provide a brief and the contract to the Financial Delegate.	Manager, Leasing and Commercial Portfolio	1 week
2.4	Execute the contract (JCU)	Financial Delegate	1 week
2.5	Execute the contract (Seller)	Manager, Leasing and Commercial Portfolio	1 week
2.6	AP to; Save contract to legal system; Update Master tenancy system; and Inform FaBS, Treasury & Corporate Finance, WHS, Insurance and Estate Services.	Manager, Leasing and Commercial Portfolio	2 weeks

Acquisition Stage 3 – Due Diligence

Due diligence is an essential step in the process, and failure of Real Estate to meet the requirements of the University shall result in termination of the contract. Due diligence shall include safety and security as well as the standard property inspections and a physical inspection by University personnel. The actions below are likely to occur concurrently rather than consecutively.

Step	Action	Responsible Officer	Timing
3.1	Arrange a full set of searches – refer JCU searches list and consider report.	Manager, Leasing and Commercial Portfolio	2 weeks
3.2	Arrange building and pest inspection and review report.	Manager, Leasing and Commercial Portfolio	4 weeks
3.3	Organise and complete a physical inspection, including safety, security, building works, etc. Write a report with a go/no go preliminary recommendation. Identify the cost of works, if any, to bring the Real Estate up to the University’s requirements.	Manager, Leasing and Commercial Portfolio Manager WHS Manager Security AD Estate Services	4 weeks
3.4	Review all the reports with Associate Director Estate Services (or their nominated rep) and AD Estate Services makes a final recommendation to proceed or terminate.	Manager, Leasing and Commercial Portfolio AD Estate Services	1 week
3.5	Inform the seller or sellers agent of the final determination.	Manager, Leasing and Commercial Portfolio	2 weeks
3.6	If proceeding, arrange for the completion of the transaction. If terminating arrange formal correspondence and start Stage 2 again.	Manager, Leasing and Commercial Portfolio	2 weeks

Related policy instruments

Real Estate Dealings Policy

James Cook University Act 1997

Statutory Bodies Financial Arrangements Act 1982 (Qld)

Land Titles Act 1994 (Qld)

Land Act 1994 (Qld)

Trusts Act 1973 (Qld)

Body Corporate and Community Management Act 1997 (Qld)

Residential Tenancies and Rooming Accommodation Act 2008 (Qld)

Property Law Act 1974 (Cth)

Schedules/Appendices

JCU Searches List

Initial Concept Template

Draft Acquisition Strategy

Administration

NOTE: Printed copies of this procedure are uncontrolled, and currency can only be assured at the time of printing.

Approval Details

Policy Domain	Estate and Facility Management
Policy Custodian	Deputy Vice Chancellor, Services and Resources
Approval Authority	Estate Committee
Date for next Major Review	30/11/2028

Revision History

Version	Approval date	Implementation date	Details	Author
23-1	30/11/2023	14/12/2023	Procedure established.	Manager, Leasing and Commercial Portfolio

Keywords	Lease, real estate, disposal, auction, acquisition, land, property
Contact person	Manager, Leasing and Commercial Portfolio