Briefings in Real Estate Finance最新文献

The latter half of the 1990s witnessed a significant increase in co-lending among US life insurance companies and other portfolio lenders. This paper will examine why co-lending is attractive to portfolio lenders, detail the factors that have contributed to the growth in co-lending, and will provide advice on selecting an appropriate co-lender with which to invest and best practice guidelines on how to structure the deal. Copyright © 2003 Henry Stewart Publications

History is important — the lessons that each of us can learn from our own experience and that of others before us can always help in formulating our views, opinions and strategies for the future.

A sound and understanding relationship between lender and borrower is essential. The temptation to borrow heavily is all the stronger as interest rates fall and when inflation is low — but it is not so much the absolute level that is the issue, but the overall capacity of net incomes to sustain appropriate debt servicing (interest and amortisation) over time.

Historically, the too heavy reliance of some lenders on the ‘valuation’ has resulted in disaster! The tales of woe and misunderstanding between those who instruct, those who advise and the borrower are legion and the subject of incredulous after-dinner stories. But the desire to put the done deal behind you and pay scant regard to the required and sometimes received management information, tenants schedule, managing agent reports, audited accounts (and anything else that seemed like a good idea to ask for at the time), must be resisted at all costs! It may well be that a lender can be properly satisfied with a direct first legal charge over the property in isolation. However, most real estate loans are not sound enough to do without protection from the actions of others or where the continuing viability of the principals is not important.

Of course, there are enormous and demanding lessons to be found from the past and they can be related to the very different investment and debt markets today. Copyright © 2001 Henry Stewart Publications

The UK economy has been in excellent shape in recent years. There are, however, risks to this positive outlook. The main risk, which has materialised since this article was written in December 2000, has been the sharper-than-expected US slowdown. We anticipate that the United States will recover relatively rapidly in the second half of 2001. The UK economy will see marginally slower growth, higher unemployment and lower inflation as result of the US slowdown. The Bank of England's Monetary Policy Committee has plenty of room to reduce interest rates further to stimulate demand, however, and there are no signs that consumer or business confidence in the UK has been adversely affected by events in the United States. The outlook for the UK economy remains positive, with the economy expected to expand at close-to-trend rates, sterling to weaken somewhat and inflation to remain below its 2.5 per cent target during the next few years. Copyright © 2001 Henry Stewart Publications

This paper looks at legal and practical issues which may arise for prospective lenders in relation to property investment and development loans concerning property in Italy. Whilst the issues discussed are necessarily subjective – and appropriate legal advice should be taken in all cases – it is hoped that the paper will provide a good overview from the perspective of the typical expectations of a UK lender, by reference to a UK deal, and the extent to which these can be met in Italy. Copyright © 2003 Henry Stewart Publications

When the author was first asked to write for the Journal, the working title was ‘Creative property lending and how to maximise gearing’. As a member of the Association of Property Bankers, and having the honour of being a past president of that organisation, the author was not at all sure that he should accept the engagement! However, encouraged by the chance to get a point of view across – ie that sound property lending does not necessarily depend on low loan-to- value ratios (and the promise of payment in liquid measure), the author gave in. In this paper, he wants to look at techniques for understanding risk, avoiding unnecessary risk, and establishing ‘correct’ pricing for the risks which cannot be avoided. Of course, there is no such thing as ‘correct’ pricing, but in this context, the author means pricing at a level which, over the long term and after allowing for the occasional loss, still shows a profitable outcome. It was often said after the 1990 crash (mainly by insolvency practitioners), that for many property lending banks, it would have been cheaper to pay for their entire property lending teams to play golf for the previous ten years! At the risk of sounding condescending, this paper will start with something obvious but which nevertheless is fundamental. Copyright © 2001 Henry Stewart Publications

The aim of Research review is to focus on current academic research which contributes to and enhances professional practice. The objective is to provide the busy practitioner with a synopsis of leading edge research in the area and hopefully to stimulate a desire for greater understanding and application of knowledge and techniques that will enhance professional practice. Copyright © 2001 Henry Stewart Publications

With the globalisation of the finance market, banks and funders are moving further afield. Coupled with the current UK market as it struggles to overcome the current economic downturn in the commercial property sector, the role of the project monitor is looking beyond the UK and more into the international arena. The skills and reporting techniques are the same, whether a development is in the UK or is international, and the need for someone to ensure that the interests of banks and funders are looked after is the same, whether the transaction involves a hotel development in Greece or an office development in London. Copyright © 2004 Henry Stewart Publications

The outlook for the UK economy is reasonably positive, but the risks remain large. The global recovery appears to have stalled, creating continued uncertainty for the UK's trade-exposed sectors, such as manufacturing. At the same time, domestic demand is showing signs of slowing more rapidly than anticipated six months ago. In this environment, business propositions should be examined for vulnerability to the slowdown in consumer demand and the retail sector. Overall, however, UK economic activity remains well placed to pick up during 2003, with the labour market remaining robust and monetary and fiscal policy both accommodative. Therefore although growth in capital values is expected to moderate, it is likely to remain healthy. Copyright © 2003 Henry Stewart Publications

Structured finance, in this paper, refers to structures developed by banks, to finance real estate developments or investments, which separate the debt and equity components of real estate. The debt component or loan amount is the present value of the lease cash flow. The equity component is the value of the real estate at the end of the lease period. These complex structures incorporate significant tax benefits.

This paper examines the current position of structured finance in the South African real estate market. The focus is on up-market decentralised areas. The research aims to establish the benefits of structured finance for both lenders and borrowers. The research was initiated by a pilot study of a specific financing structure for a decentralised office development (Evans 2000). This pilot study raised the question of ‘who were the winners?’ in the deal.

The research has been conducted with the participation of selected banks and consultants who are the lenders and creators of the structures, as well as with the users who are the real estate investors or developers. A survey, in the form of structured, in-depth interviews was conducted with eight banks, two structured finance consultancy firms, eight developers and two investors, all of whom are active participants in the structured finance market.

As the criteria surrounding each deal vary, a ‘deal specific’ finance structure is created for each development or investment. This has led to the information collected being portrayed qualitatively. However, because of the confidential nature of each structure, research focuses on general rather than specific structures.

This paper examines first the aims of structured finance and the method of achieving these aims; secondly, the criteria for banks entering into these structures; and thirdly, the structure and tax risks which are invariably passed on to the borrower. Results of interviews reveal that banks and borrowers benefit from these finance structures by maximized loan amounts and fixed interest rates. The potential tax obligations, however, may have a significant financial impact on borrowers. Copyright © 2002 Henry Stewart Publications