Development finance
Deal box · EUR 1M to 50M+
Borrowers · Construction facilities
What development finance does.
See our approachThe site is funded first and the works follow in instalments, each released once the stage before it has been signed off.
Facilities across that range, with exceptions considered case by case, at up to 75% loan-to-value and for terms of 6 to 72 months.
Unit sales, a sale of the finished building or a longer loan once it is let: the repayment route is set out before indicative terms are issued.
Property development finance carries a scheme from bare site to completion, whether a block of apartments, townhouses or a hotel. Because the building does not exist yet, investors read the cost plan, the contractor and the value of the finished scheme as closely as the land itself.
Watson AM does not lend. We assess the scheme, structure the facility and its security, prepare the file and take it to the investors in our network it fits; each of them runs its own assessment and decides whether to fund.
How fast a scheme moves.
Construction runs to a programme, and the property development finance has to be ready before the contractor starts. These timings are ours; the investors’ own checks and the registration of the security set the rest.
Enquire
The site, the scheme and its cost, the amount sought and how it will be repaid.
Read
A principal reads the brief, checks it against the deal box and lists what the file still needs.
Terms
Indicative terms in writing: the facility, the drawdown outline, the security and the exit.
Investors decide
Each investor runs its own checks and decides; 58 days is our average from mandate to funding.
Indicative terms are subject to investor approval, due diligence and final documentation. Funding is not guaranteed.
The money follows the works.
A development facility is drawn in steps and measured two ways, against what the scheme costs and against what it will be worth. Pick a tab to see what investors read in each.
The first drawing usually buys the site. After that, money for the works is released in instalments, each one once an independent surveyor has confirmed the stage before it is built, so the amount outstanding stays in step with what stands on the ground.
What investors test
- The cost plan
- The build programme
- Sign-off at each stage
Loan-to-cost sets the facility against the full cost of delivering the scheme: land, construction, professional fees and a contingency. Whatever the loan does not cover is the developer’s equity, and on a build it goes in first.
What investors test
- Equity in the scheme
- The building contract
- Room for overruns
Loan-to-value sets the facility against what the property is worth, both as it stands and once complete, the gross development value. Our deal box runs to 75% loan-to-value; the Geneva file below sat at 25%.
What investors test
- Value today
- Value once complete
- Sales or letting evidence
From the case files.
24 apartments in Geneva, after two years of searching.
Facility
CHF 12'000'000
acquisition and construction
Loan-to-value
25%
Term
36 months
Term sheet
1.5 months
The contractors set to build the scheme introduced us to its developer, who had spent almost two years looking for financing. Before the file could go to investors, internal and communal challenges had to be resolved, and we worked through them with the developer first.
A first-rank mortgage and a personal guarantee secure the facility. The low loan-to-value reflects substantial sponsor equity and a prime city-centre location. Read the full case file.
Development questions.
What developers ask before they send a scheme. If yours is not here, write to us and a partner will answer it.
What is development finance?
Development finance is a loan secured on property that funds the purchase of a site and the construction on it. It's released in stages as the works advance and repaid once the finished scheme is sold or refinanced, so its term follows the build programme. Watson AM arranges development finance for developers across Europe and presents each facility to the investors in its network it suits.
How much can I borrow with a property development loan?
Our deal box runs from EUR 1M to EUR 50M+, with exceptions considered case by case, at up to 75% loan-to-value and for terms of 6 to 72 months. Where a facility lands depends on the cost of the scheme, its value once complete, the equity you put in and the strength of the exit.
How is a development loan drawn down?
In stages. The first drawing usually covers the site, and the works are then funded in instalments as each stage is inspected and signed off, often by an independent quantity surveyor. The drawdown schedule is set deal by deal and agreed with the investors before the first drawing.
How is Watson AM different from a development finance broker?
A broker passes a scheme to banks and development finance lenders, who fund loans from their own balance sheet. Watson AM arranges the financing and does not lend: we assess the scheme, structure the facility and its security, prepare the file and present it to the investors in our network it suits. Each of them runs its own assessment and decides whether to fund, and the security is registered as a condition of their funding. Brokers can submit a client's scheme through the enquiry by choosing Broker / Introducer.
How quickly can development finance be arranged?
A principal reads your brief within 24 hours, and indicative terms follow within 72 hours of a complete enquiry. Across our files, the average from mandate to funding is 58 days, most of it taken by the investors' own checks and the registration of the security. Indicative terms are subject to investor approval, due diligence and final documentation. Funding is not guaranteed.