_Due Diligence Becomes a Strategic Priority as Transaction Conditions Evolve in 2026
However, as momentum builds, investors and existing landlords are placing greater emphasis on understanding the physical condition and future cost profile of their assets. Against a backdrop of increased global instability and shifting energy dynamics, property investors are navigating a more complex risk environment than anticipated just months ago.
This only sharpens the need for robust, forward‑looking due diligence that tests how assets will perform under changing economic and operational conditions.
Knight Frank’s Building Consultancy team has observed a measurable increase in enquiries associated with condition reporting and long-term asset management and enhancement planning. This is being driven not only by acquisition activity, but also by existing owners seeking to better understand ongoing running costs, deferred maintenance risk and future capital expenditure requirements across their portfolios.
Over the past 12 months, the team has worked with a number of retail and commercial clients across both individual assets and portfolio holdings to assess building condition, services infrastructure and compliance status. These assessments are enabling more informed planning around lifecycle costs, maintenance obligations and potential upgrade pathways. In many cases, these insights are now being incorporated into financial modelling to better quantify ownership risk over the medium to long term.
With elevated construction costs continuing to influence feasibility outcomes for renovation and redevelopment works, identifying latent building issues, such as ageing plant and equipment, facade degradation or outdated accessibility provisions, is becoming an increasingly important consideration at both acquisition and ownership stages.
Transactional Activity Increasing Demand for Building Advisory
Retail transaction activity has been uneven across major markets, with momentum softening in parts of the sector as pricing, cost pressures and occupier demand continue to recalibrate.
As a result, technical due diligence is increasingly being undertaken at both an asset and portfolio scale, with purchasers seeking to understand compliance status, maintenance backlogs and potential upgrade requirements prior to buying. This is particularly relevant within ageing warehouse and retail assets where future renovations, plant replacement or services upgrades may be required to maintain leasing competitiveness or meet evolving sustainability expectations.
Where assets are acquired as part of broader portfolio transactions, owners are also seeking to standardise asset performance across holdings through long-term capital works planning. This may include the staged replacement of mechanical services, fire safety systems or vertical transport infrastructure to mitigate operational risk and support leasing outcomes.
Tenant Relocation Driving Development Activity
The delivery of new commercial developments, particularly within the Sydney CBD, has contributed to an increase in single and multi-floor lease transactions as occupiers relocate into newly completed metro-linked office towers.
This has been reflected in higher volumes of landlord building works being undertaken or quoted across existing office stock as tenants vacate space. These works help bring spaces up to current leasing standards and make them suitable for new tenants where building systems or layouts are outdated.
As a result, secondary office assets are increasingly undergoing renovation to improve building performance, accessibility and environmental efficiency. Demand for technical advisory has grown accordingly, particularly in relation to services upgrades, compliance works and asset repositioning strategies designed to extend building life and maintain tenant appeal.
Whether the next 12 months represent a period of consolidation in tenant relocation ahead of further development completions remains an important trend to monitor.
Emerging Infrastructure Demand
Looking ahead, the continued expansion of artificial intelligence is expected to drive sustained demand for data centre infrastructure.
Site availability, servicing capacity and sustainability performance are likely to remain key considerations for new facilities, particularly in relation to power supply, cooling infrastructure and operational resilience. These constraints are reinforcing the importance of early-stage building advisory in assessing development feasibility and long-term performance requirements prior to site acquisition or design finalisation.
As investment activity accelerates across multiple sectors in 2026, the ability to identify and manage future building-related risk is set to play an increasingly prominent role in acquisition and ownership decisions, positioning technical due diligence and long-term asset planning as essential components of commercial property strategy.