One of the major challenges to many Real Estate Investors and developers in Kenya is roping-in Finance into their development projects, in order to bridge the finance deficit occasioned with not having all the finance to meet the project Budget or deficit.
There are various forms of Real Estate Finance and Capital Raising solutions in the Kenya, and in particular those offered by Buildafrique Consulting Group, common being:
a.) Equity Finance: Equity Finance is occasioned for joint venture structured project, where the project sponsor and the investor bring resources together in an investment model that manage various risks in the investment project, and provide returns on investment for both the project sponsor and the investor.
b.) Contractor Debt Finance: This is a modern real estate finance model whereby the Contractor comes into the project as both the Building Contractor and as an Investor in two separate contracts for managing the two forms of engagement. The investment could be in the form of materials, labour, or expertise bought in the project. The Contractor is paid either through proceed from the investment or through equity stake in the project.
c.) Institution Debt Finance: This is a form of real estate debt that is offered by various real estate debt fund and management institutions, other than banks. The debt fund is available both locally and internationally.
d.) Bank Debt Finance: Bank debt finance is the form of real estate finance that can be provide by your local or international bank, either as project finance, or personal finance against your balance sheet. Most banks shall require a collateral as security for the debt.
e.) Pre-Sale Finance: Pre-sales finance involve raising part of real estate finance through off-plan sale of the development units or products. The financing model however requires the developer to meet the other part of finance deficit through other financing models to avoid financial risks in the project associated with stalling of the project due to inadequate finance.
f.) Consultancy Services Finance: In this form of financing, Project Consultants contribute their professional expertise as equity into the project, and whereby they own a stake in the project in exchange for their professional contribution in the project. This is common in Joint Venture structured project, whereby the project sponsor may not have all the financing the pay the Consultants at the initial stage of the project.
g.) Islamic Finance: Islamic finance is Sharia-compliant real estate finance that adhere to Sharia law guidelines. In recent time, the financing model has been made accessible to both muslim and non-muslim.
Capital raising takes structured step process which includes a Consulting and Advisory Phase, Investor Relations Phase, Transaction Phase, and Implementation and Recovery Phase, across all form of financing.
THE CONSULTANT TO ENGAGE:
The Consultant to engage for Project Finance and Capital Raising for your development project is a Project Finance Consultant.
Writer of the Article:
This Article is written by Buildafrique Consulting Group, Kenya multi-disciplinary consultancy, that offers END-TO-END DEVELOPMENT CONSULTANCY, REAL ESTATE, and PROJECT FINANCE solutions through specialized subsidiaries. Among our solutions includes:
- Feasibility Studies and Market Research.
- Project Finance and Capital Raising.
- Joint Venture & Finance Structuring.
- Project Management.
- Investment Design Appraisal.
- Quantity Surveying
- Construction Cost Consultancy
- Physical Planning and Planning Permissions
- Environmental Management and Impact Assessment
- Real Estate Development and Structured Investment Solutions
- Property Valuation
- Marketing and Property Sales Agency
- Property Management and Facility Management