Our Development Finance strategy provides bespoke funding solutions for residential, commercial, and mixed-use development projects across Europe. We underwrite and structure senior debt, stretched senior, mezzanine, and hybrid facilities with a focus on capital preservation, strong collateralisation, and rigorous risk-adjusted return thresholds.

Strategy Overview

We partner with experienced sponsors, developers, and asset managers to provide development capital across core geographies. Our focus is on well-located, planning-secured schemes with clear exit strategies and demonstrable end-user demand.

Instruments

• Senior Development Loans:
  First-ranking debt secured against land and development assets. Typically up to 65–70% Loan-to-Gross Development Value (LTGDV).

• Stretched Senior / Whole Loans:
  Higher leverage solutions (up to 75% LTGDV) with internal credit enhancement, suitable for projects with experienced sponsors and robust feasibility.

• Mezzanine & Preferred Equity:
  Subordinated capital structured to complement senior lenders and bridge equity gaps, with intercreditor protections and priority distribution mechanics.

• Forward Funding / Forward Commitment Structures:
  Used for de-risked pre-let or pre-sold schemes, allowing early-stage capital release and alignment with institutional take-out investors.

Underwriting Approach

• Sponsor Due Diligence:
  Assessment of track record, balance sheet strength, delivery capability, and alignment of interests through meaningful equity contributions.

• Scheme Viability & Exit Analysis:
  In-depth appraisal of development cost budgets, timeline feasibility, local market absorption, and refinance/sale exit scenarios.

• Collateral & Security Package:
  Full suite of legal protections including first legal charges, step-in rights, cost overrun guarantees, and performance bonds as appropriate.

• Monitoring & Governance:
  Independent monitoring surveyors, quantity surveyor reporting, and drawdown controls ensure capital is deployed in line with construction milestones and approved budgets.

Risk & Return Profile

• Enhanced Credit Spread:
  Development loans typically generate a material premium over stabilised real estate lending due to complexity, illiquidity, and delivery risk.

• Asset-Backed Downside Protection:
  Capital is secured against hard assets with conservative assumptions around land residual value and exit pricing.

• Short-to-Medium Duration Exposure:
  Typical loan tenors of 12–36 months with cash flow visibility aligned to development phase milestones.

• Inflation-Responsive Returns:
  Construction cost inflation and strong rental growth in constrained markets offer potential for higher-than-underwritten developer margins and lender upside participation.

Use Case for Institutional Portfolios

Development finance provides:

• Diversified exposure to real estate sub-sectors (residential BTR, PBSA, logistics, office, life sciences)

• Floating rate, short-duration credit in an inflationary environment

• Portfolio construction benefits via low correlation to traditional fixed income and public market real estate securities