With traditional financing sources largely unavailable, property developers are turning to private investors to fund projects, creating outstanding opportunities for investors who can access this market, according to private investment and advisory firm Wingate Group.
“It coincides with high net worth investors shying away from equity markets while looking for sources other than direct property, bank deposits and bonds to provide yield and diversity,” says Ryan Levin, co-head of Wingate’s property group.
“Over the last three years, Wingate has been involved in the funding of property and development projects valued at more than $1.7 billion, in the process providing over $220 million in mezzanine funding facilities to property owners and developers.
“In the post-global financial crisis environment, with banks having curtailed their lending, and valuations generally reduced, many substantial and well established property owners and developers have found themselves with insufficient equity and bank support to fund their portfolios and developments. At the same time, most specialised property lenders have themselves disappeared from the market.
“This has created excellent ongoing opportunities for private investors who are in a position to provide funding, and we have been working closely with our clients and co-investors on these.
“While the returns we generate are attractive, our primary focus is on risk mitigation and security of our positions. Only once we have satisfied ourselves that a particular investment represents a good risk proposition, do we focus on the return side of the equation,” Mr Levin said.
Mr Mark Harrison, co-head of the Wingate property division, added that property developers are also seeing the benefits of private investment.
“Developers are finding that many of the funding sources they may have used in the past are no longer able to deliver the finance they need, when they need it.
“With timing and responsiveness perhaps the most important considerations for developers in the current market environment, our active approach allows us to move quickly to assess an opportunity and, if it meets our criteria, deliver the funding for the project to proceed,” he said.
“Wingate has substantially increased its property lending activity since the global financial crisis, making it one of the dominant specialised property funders in the Australian middle market, and we continue to see outstanding opportunities in this area for investors.
“We’ve maintained our pristine performance record for our co-investors while delivering excellent returns,” Mr Harrison said.
Wingate’s approach is to fund its facilities in partnership with a select group of private investors, and it has delivered a net return in excess of 20 percent per annum to its co-investors over the last three years.
The Wingate Group, founded in 2003, is a private investment and advisory firm focused on property, private equity and listed investments. The Group has been active in mezzanine property funding and investing for the past five years and currently has over $1 billion in property assets under finance.
Wingate’s clients and co-investors include some of Australia’s most substantial private families and business owners.
Over the years Wingate has built partnerships with its clients by ensuring a complete alignment of objectives and incentives, and by taking co-ownership of their goals.
For more information please contact:
Ryan Levin or Mark Harrison – Phone: 03 9913 0700
20 February 2012