EQUITY CO-INVESTMENT RESIDENTIAL SUBDIVISION
CapitalGroup was approached to assist with the acquisition and development of a 10 hectare land holding in Orewa, on the North Shore of Auckland. CapitalGroup assisted in the early phase providing the development partner with an equity structure which firstly allowed him to acquire the property through funding the land deposit, and secondly to gain resource consent prior to drawing on a senior bank development facility.
In this instance CapitalGroup was able to gain sufficient comfort around the planning and construction risk prior to gaining resource consent or obtaining a fixed price construction contract, through a thorough due diligence process.
CapitalGroup invested funds for the following reasons:
- The site was well located
- The developer was experienced and known to CapitalGroup
- Strong pre-sales had been achieved
- Planning risk was minimised after receiving advice which indicatedthe development’s compliance under the District Plan, this was supported through positive dialogue with Council in the pre-planning phase
- Costs in particular construction costs were estimated by reputable engineers and reviewed via a quantity surveyor with an existing relationship with CapitalGroup.
- Geotechnical reports had been completed on the site.