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Project Evaluation Development (P.E.D.) College

  • 23-11-2011 12:50pm
    #1
    p.oconnor
    Registered Users, Registered Users 2 Posts: 548 ✭✭✭


    Hi lads and Ladies

    I am currently undertaking a PED for a construction management college project of a hypothetical shopping centre with a building cost of approx €17.3 million

    I have tried to ring a few clearing banks and they do not want to release any information on the source of financing a project like this and keep referring me on to other members of staff.

    I was just wondering if anyone had any realistic suggestions on a couple of different source of finance such as Clearing banks, Merchant banks, International funds etc. to make up the €17.3million with a couple of million of the developers money and also the general amout of interest over say a 21 year period.

    Thanks in advance

    Patrick


Comments

  • #2
    soddy1979
    Registered Users, Registered Users 2 Posts: 284 ✭✭soddy1979


    The business banking section of a financial institution may lend this themselves. They would charge you an interest rate (and I believe there is generally a baloon payment at the end of the loan term) - they then may offload their risk, by securitizing the loan with a number of other loans and selling them in the bond markets. These products are known as Commercial Mortgage Backed Securities, or CMBS.

    There are plenty of property funds out there. They may invest with you, but would take an equity interest in the project. You may not repay them interest or principal, but you repay them an amount proportional to the share of the project they invest. They will probably include a clause to protect their share of the investment first.

    Investment Banks and Asset Managers may invest in property also for proprietary purposes or on behalf of clients. I'm not sure whether the investment would be in the form of credit or equity, I suspect either.


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