AFG Blog

Property development project funding

Until the South African economy recovers from the impact of the pandemic, Adrian Goslett, regional director and CEO of RE/MAX of Southern Africa, predicts that house price appreciation will remain low for 2021, but with interest rates so low, it is certainly a good time to be buying an investment property.
The strong demand from property purchasers is an indication of where South Africa’s property market will be in the first half of 2021. The high demand will continue into this period, and demand will start to exceed supply. Quality stock will be harder to find and that will move us from a buyer’s market into a seller’s market during the second half of next year.
Such a scenario is great for investors and property developers alike. With remote working opportunities, areas that were previously viewed as holiday or weekend destinations, are now being considered as locations for permanent residences.
So how can property developers take advantage of this trend while overcoming the possibility of a cash shortage in completing the projects required for successful transfer? The short-term cash loan and bridging finance experts at CorpFin have successfully funded many Property Developments.
“Our goal has always been to connect projects and entrepreneurs with experienced investors, without all the institutional angst and protracted dealings of traditional lenders,” says Director and CEO at CorpFin, Gerhard Truter. “Property is the prototypical investment model, so in times like these, there is great opportunity.”
A typical due example of CorpFin’s project funding assistance would be to allow a developer to settle the purchase of land and complete any bulk infrastructure services so that transfers can take place and subsequent payments released. CorpFin’s team of due diligence and legal experts assesses the potential of a property development scheme before drawing up a funding opportunity deal sheet for their investors. Loan amounts would typically start at around R10 million. In most cases, a monthly interest fee would be payable by the borrower, and the capitalised interest and capital would be repaid from the proceeds of stands or plots sold.
Visit CorpFin for more information.