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Bridge Financing for Real Estate Projects

Challenges for Project Development Companies
Avobis has acknowledged that project development companies and property developers are facing ever greater challenges in real estate projects in Switzerland in the context of selective lending by banks.

Increasing regulation (Basel III + IV) requires project development companies to have a pre-sale rate of up to 60%, which is a challenge for small and medium-sized promoters. Consequently, some project developers have to forego lucrative and high-margin projects as the required capital is already allocated.

A large number of small and medium-sized project developers often find themselves confronted with hurdles in order to invest quickly and easily in developable plots. They miss out on interesting opportunities due to a lack of capital.

New "project development" service with capital release
Over the past 20 years, Avobis has built up a large network of investors, project developers, architects, lenders, family offices and asset managers, and aims to bring together project managers and investors with its new project development service.

At an advanced stage of the project, project developers should be able to liberate around 40-60% of their invested equity via a loan from private or institutional investors in order to realize other projects.

The investor provides capital to the project development company over an investment horizon of 12-24 months, for which it is compensated with 6-8% interest per annum. Avobis carries out the due diligence on the project and the project development company and provides the investor with the basis for the investment decision according to the progress of the project and the overall situation.

 

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