Resource R–03 / Decision memo

Analysis becomes useful when it ends in a decision.

A disciplined real estate investment memo for turning diligence, underwriting, execution risk, and judgement into a clear recommendation.

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Investment committee memo

Project Mwangaza

Urban residential development / Nairobi

Decision: Approve acquisition
Capital: KES 340m equity
Strategy: Develop to sell
Hold period: 36 months
Prepared for: Investment Committee

Decision requested

Approve the acquisition, subject to four conditions.

Recommend

Approve up to KES 340 million of equity to acquire and develop the site, targeting a 24.1% project IRR and 1.62x equity multiple in the base case.

Total cost

KES 1.18bn

Project IRR

24.1%

Equity multiple

1.62x

Margin on cost

27.4%

Recommendation logic

The entry basis is attractive and the market case is credible, but approval should not substitute for closing discipline. Title, access, planning capacity, and the cost plan remain explicit conditions precedent.

Investment thesis

Entry basis

Acquire below replacement cost with a defensible path to stabilised value.

Demand

The product addresses a visible, evidence-backed gap rather than a general market story.

Execution

The team can obtain approvals, deliver the scope, and commercialise within the underwritten programme.

Downside view

What happens when the thesis is wrong?

Selling price

−10%

IRR 14.8%

Construction cost

+10%

IRR 17.1%

Programme

+6 months

IRR 19.0%

Memo architecture

Nine sections. One accountable recommendation.

The structure separates evidence from assertion and analysis from approval. A reviewer should always know what is known, what is assumed, and what remains unresolved.

Decision requested

State the exact approval, capital commitment, authority, and timing required.

Recommendation

Lead with the answer, the return case, and the conditions that make the recommendation investable.

Opportunity

Explain the asset, location, strategy, counterparties, and why the opportunity exists now.

Investment thesis

Set out the few propositions that must prove true for the investment to work.

Market evidence

Connect demand, supply, pricing, liquidity, access, and competing projects to the underwriting.

Financial case

Summarise sources and uses, returns, valuation, capital structure, and downside cases.

Execution plan

Show the programme, approvals, delivery path, commercial strategy, and accountable owners.

Risks & mitigants

Name the risks directly, quantify exposure where possible, and assign a practical response.

Approval conditions

Convert unresolved issues into explicit conditions precedent and post-approval actions.

Risk register

Risk is only useful when it changes the decision.

Each material risk is paired with severity, evidence, ownership, and a mitigation or approval condition—never buried in a ceremonial disclaimer.

Risk	Severity	Investment response
Planning approval	Medium	Obtain written planning opinion before completion.
Construction escalation	High	Tender 70% of cost and retain a 7.5% contingency.
Sales velocity	Medium	Phase release and require presales before full debt draw.
Title / access	Low	Legal due diligence and registered access condition precedent.

The final page

Make approval conditions part of the investment case.

The template includes the memo, a one-page committee summary, an approval conditions register, and guidance for adapting it to acquisitions and developments.

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