STRUCTURE AND FUNDING
We use our own capital combined with external debt where we see value in holding the asset for long term income and capital growth.
We identify a joint venture partner, limiting our capital commitment and risk exposure, whilst linking our return to performance.
We manage the project on behalf of a partner, sharing in the profit on the successful sale or letting, with minimal equity invested. When the Group identifies assets that it intends to develop or asset manage and hold for the longer term, it uses its own capital combined with appropriate external debt.
Where we see significant potential to create profit in the short to medium term and are keen to limit our equity commitment and risk exposure, we look to bring in a partner. Our approach to working with our partners includes:
• Co-investing alongside a larger partner where we have a minority equity stake, whilst receiving a “waterfall” payment whereby we obtain a greater profit share than the percentage of our investment, depending upon the profitability of the project. This strategy is used for the developments at Barts Square, London EC1 and One Creechurch Place, London EC3.
• Managing the development process from site acquisition, through construction to letting or sale. In these structures we do not own the asset, committing no or minimum equity. Our return is linked to the profitability of the development, allowing us to potentially benefit from a significant profit that reflects our contribution to the project’s success. We are using this strategy in the development of the office at One Bartholomew Close, London EC1.