Equipment Finance from Burlings Bank International

UK & International Property Finance

Burlings Bank International – Business Equipment and Property Finance

International Property Finance
Some basic advice

International Property

International property finance for project development has evolved tremendously during the last twenty or so years. Projects with any reasonable returns can be funded especially if the management team can demonstrate a succesful track record. Financiers are always looking for strong management on any develppment project.

Burlings in Merchant Banking Services
Merchant Banking is the process of acting as principal and/or agent in project financing. The Merchant Banker can commit his firm’s capital to a transaction, either in the form of debt or equity and in either event may receive an equity position as part of the compensation for its service. At times the Merchant Banker may also act as agent by putting in place the permanent debt, equity or private placement financing needed by the clients company.

In today’s global village, investing in property located in another part of the world is becoming a well established practise. There are a number of international real estate agents who will easily to provide the necessary support and assistance and help identify suitable projects. This includes studies and search services to ensure that your selection will not spring any nasty surprises later on. Buyers are therefore encouraged not to try to save on such expenses.

Only recently a UK company was forced to tear down their newly constructed building in Spain, after spending two years on planning and having it build. The land purchased was not classified as building land, so the local council insisted on a hefty fine as well. This company did not use a local solicitor to advise them when purchasing their plot of land.

Investing in large commercial cross border property, such as office blocks, hotels or other land development projects, normally require an international team of advisors to ensure that no stone is left unturned, in regard to the legal and communal rules and regulations. While this due dilligence comes at a cost it is a must before finance can be considered. It is often adviseable to consult the investor or finance house which valuer is acceptable to them, or just select one of the top international agencies. Their reputation is enough to guarantee the findings.

One of the most complicated and time consuming elements can be caused by searches and legal wrangling. A lawyer in one country might consult a counterpart in the target market, but before the home based lawyer is satisfied it can throw a project off course for several months. Plenty of time is therefore required for large international transactions.

Whatever the subject, it is just good advice to engage people and advisors who have been involved previously in concluding such large scale international projects, and who know how to bring these to a successful completion

The Finance

The same goes obviously for all financial requirements. A banker in one part of the world, making a financial decision about a project or property development across the globe will need reliable data and advice. He/she will not allow a transaction to complete unless all points are covered. Often it is the reputation of the buyer or the seller which can prove decisive if a project will proceed timely or not. A transaction between seasoned partners will undoubtedly find an easier passage, than between two novice companies entering the international real estate game for the first time.

But whatever the opportunity which presents itself, most likely it needs professionally arranged finance. Obtaining the right level of financial commitments against competitive terms and conditions can be a challenge internationally, as a number of additional factors will play a part. A reason why also the finance can also influence finalising transactions, can not always be delivered against tight deadlines.

Property valuation is of course the overriding issues as far as determining the purchase/selling price. Currency fluctuations between markets can be the other. If the purchase is for a long term investment, a view can be taken as to which factor weighs heaviest. Also, an estimate might have to be made if the currency differential will change anytime soon. The importance therefore when dealing in property on an international level, different rules are brought to bear.

A commercial mortgage or development loan might have the same terminology in cross border language, but this does not mean that the rules and regulations governing such transactions also are the same from one jurisdictions to the next. Often even the contrary.

Multinationals

The multinationals of this world in general have made a great contribution over the years to bring some sort of standardisation in the regulations governing international property transactions. Due to their scope and size they have been able to convince governments in foreign markets to liberalise land ownership, open up developments, and establish some sort of working solutions in as far as ownership and rules for renting/leasing land and buildings. As they had the possibility to fly specialist teams around the world, important concessions often could be extracted when playing one government against another, especially when there would be a large number of new jobs involved. Also, the multinationals enabled downtown and edge of town developments to take place on a large scale, making cities around the world compete as to the most impressive skyline or tallest building in the world or continent.

Besides the main industrial companies there have been international chains of hotels, restaurants, airlines, and car rental companies who have been the early explorers in occupying property in foreign markets. More recently have of been the development of shopping centres and business parks. As the infrastructure has improved in many developing markets, more and more investors have decided to put their toe in newer markets, often with excellent results.

Finally, it has been the internet revolution that saw property prices boom and bust throughout most of the industrialised world. Quite a few companies have been stung when the dot com boom ended. However, long term property always comes back and new markets will continue to present itself on a global scale. Therefore, globally speaking international property opportunities are definitely in abundance for at least until 2020.