Financing project development?

Posted on 18-10-2019 by F. Geurtsen

According to KMPG's Property Lending Barometer 2019, traditional banks in the Netherlands are providing fewer and fewer property loans. This is in contrast to Germany, where property financing is still of great strategic importance. In particular, development projects of less than €20m can no longer go to traditional banks in the Netherlands.

These results emerge from the recently published Property Lending Barometer, which international accounting and advisory firm KPMG presents annually. In it, KPMG examines sentiment around property financing in 14 European countries.

According to the survey, for a financing size of less than €20m, the majority of Dutch banks are only open to financing investment property, or property projects with direct income. Development projects of this financing size are often rejected at the outset. This is despite the high demand for housing and healthcare real estate.

Project developers should therefore start using alternative forms of financing, such as crowdfunding. Especially in the initial phase (< €5m) of a project, the financing form crowdfunding can be an excellent fit. For instance, to purchase the land and then go through the permit procedure. Through pre-sale or sale to an end investor, the loan can be repaid at the end of the term.

Development projects are increasingly being notified to Crowdrealestate. The number of development projects on the platform is therefore expected to increase further. There is a lot of interest in this from the crowd. For example, the latest development projects were oversubscribed within hours.