Property Partners form a primary finance facilitation

Posted On Monday, 22 November 2004 02:00 Published by
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Property Partners, has formed Property Partners Finance to provide a more comprehensive funding service to property developers and investors

22 Nov 2004 :
Living up to a promise made at the end of last year to provide a more comprehensive funding service to property developers and investors, Stuart Chait, Chief Executive of the three year old Cape headquartered company, Property Partners, has formed Property Partners Finance.

The aim of the new entity is to assist clients to secure "Senior Debt" - the primary loan required for the financing of property developments and deals.

Once this is secured, says Chait, Property Partners' now well established ability to provide mezzanine finance or private equity will come into play – if required. Property Partners Finance will also structure the funding for these transactions.

"A synergy will be created whereby all funding requirements, from senior debt, mezzanine debt and private equity, if required, are structured and implemented by one source – with the client’s input – thus realising the best possible funding structure."

Chait said that Property Partners Finance will operate nationally and at the moment is the only company in South Africa providing this type of service.

"This move," said Chait, "adds a whole new dimension to our business and will contribute in excess of R1 billion in business via this subsidiary in the year ahead."

Property Partners Finance is a joint venture between Property Partners and Mark Pienaar, the MD of Property Partners Finance.

His background includes corporate and commercial property financing with Cape of Good Hope Bank and, later, Nedbank Corporate Property Finance which absorbed COGHB, as well as several years of property experience.

Ivo Nestel has subsequently joined the company. He worked for many years in investment banking with Dresdne Kleinwort Wasserstein at their London and Swiss offices. The new men’s combined experience, says Chait, gives them an understanding of the risks involved in property and general financing and how to minimise these.

"We will," commented Pienaar, "be structuring deals so that they meet the banks’ criteria and at the same time satisfy our clients' needs and specifications. All too often deals have failed or been rejected when the client could have benefited greatly from a different loan structure."

Property Partners Finance, says Pienaar, structures loans that the banks "have an appetite to proceed with". Almost all developers, added Nestel, run into cash flow problems.

"Our task, as loan facilitators, is to help them through the crucial periods in their development by arranging a loan in a way that will suit all concerned. The ability to provide and structure a mezzanine funding structure alongside the senior debt adds significant value to a project urgently needing to get off the ground."

Chait indicated that, following on this breakthrough announcement, Property Partners will in the week ahead have further vital news for the market, all of which, he said, will enable them to step up their loan and financing services and turnover. The company, he said, has "made an excellent name for itself in the short time it has been around" and has so far given "highly satisfactory" returns to its UK backers, Highneal.

Publisher: Cape Business News
Source: Cape Business News

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