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

The following section outlines a structured framework used to analyse development finance and structured real estate lending from a conceptual and research perspective. Our approach focuses on understanding how different forms of capital—ranging from senior development loans to mezzanine and preferred equity—interact with underlying project economics, sponsor capabilities, and security structures. By studying these instruments through the lenses of leverage, collateralisation, and risk-adjusted return characteristics, we aim to develop a comprehensive view of how development finance exposures behave across market conditions. This overview is intended to highlight internal analytical principles and insights rather than describe or promote any investment product or service.

In examining these instruments, the framework considers multiple dimensions of project assessment, including sponsor due diligence, scheme viability, exit scenarios, and collateral structures. We analyse how factors such as equity contribution, intercreditor protections, performance bonds, and monitoring controls influence the robustness of the financing structure. By evaluating cash flow visibility across development phases, risk mitigation features, and alignment mechanisms with stakeholders, the framework provides a lens for understanding potential outcomes under different scenarios. All analysis is conducted for internal purposes and is not intended as advice, solicitation, or financial promotion.

Finally, the framework also highlights how different development finance structures behave under varying market and project scenarios. It considers structural features, project timelines, and hypothetical sensitivities under different market assumptions. The discussion further explores how structured development capital interacts with macroeconomic and sectoral trends to inform internal thinking on risk, diversification, and potential performance dynamics. The bullet points that follow provide a detailed breakdown of this internal research approach and the key dimensions considered in assessing different development finance instruments.

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.

Characteristics 

• 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