tmmonline.nz  |   landlords.co.nz        About Good Returns  |  Advertise  |  Contact Us  |  Terms & Conditions  |  RSS Feeds

NZ's Financial Adviser News Centre

GR Logo
Last Article Uploaded: Friday, April 23rd, 6:19PM

Mortgages

rss
Latest Headlines

New mortgage lender for developers

A second tier lender has launched a new first mortgage fund to provide loans to property developers.

Friday, March 19th 2021, 8:52AM

Pearlfisher Capital wants its new fund to boost new property development as banks maintain tight credit criteria. 

The non-bank lender says its fund is for developers who are finding it more difficult to secure funding from banks.

Pearlfisher director Tony Abraham said the fund gives borrowers an opportunity to access non-bank funding for well-considered projects that are at the low to medium end of the risk spectrum. And which meet Pearlfisher’s investment criteria.

Abraham says developers will need to have consents and a construction contract in place and have pre-sold a percentage of the development before funding is considered.

“We will only lend at a level that meets our criteria and we are comfortable with.”

He says finance for developments outside the fund can be considered – on a project by project basis – but the fund will have first priority.

The fund is being targeted to help address concerns about the supply of residential housing. And the challenges faced by many borrowers in raising flexible debt for projects.

“It provides a committed line of capital for Pearlfisher to expand its first mortgage lending.”

Abraham says inquiries about developer finance have increased 50% since the fourth quarter of last year.

“Banks’ increased capital requirements and strict lending conditions mean many developers are shifting to non-bank first mortgage funding, which is already well established in offshore markets – including Australia, Europe, UK and the US.

“We are looking to step in and provide debt for housing projects that have been finding it challenging to access finance from banks.”

The fund’s first transaction is a terrace house development that is 100% sold to Kāinga Ora. Abraham says this is a good example of the type of activity the fund expects to participate in.

It is targeting developers who have two to three-level projects of eight to 20 units.

“At this size the cost of obtaining non-bank funding compared to bank finance is of not much concern to developers. They just want to get on with their projects,” says Abraham.

The firm is courting investors for the new fund.

Investor returns are expected to be 6-7.5% yearly (pre-tax, net of fees) on invested capital.

Pearlfisher has funded a variety of developments since its inception 11 years ago. Including numerous residential land subdivisions, multi-unit townhouses, high rise apartments and suburban retail developments.

Until recently funding had been on a deal-by-deal basis. During the past 12 months, Pearlfisher has settled more than $100 million of property development and investment transactions – despite the challenges and uncertainty caused by Covid-19.

Tags: Lending

« The Kiwi Adviser Network launchesAre long-term rates the best bet? »

Special Offers

Comments from our readers

No comments yet

Sign In to add your comment

 

print

Printable version  

print

Email to a friend
News Bites
Latest Comments
Subscribe Now

Mortgage Rates Newsletter

Daily Weekly

Previous News

MORE NEWS»

Most Commented On
Mortgage Rates Table

Full Rates Table | Compare Rates

Lender Flt 1yr 2yr 3yr
AIA 4.55 ▼2.25 2.59 ▲2.89
ANZ 4.44 2.89 3.25 3.39
ANZ Special - 2.29 2.69 2.79
ASB Bank 4.45 ▼2.25 2.59 ▲2.89
Basecorp Finance 5.49 - - -
Bluestone 3.49 3.34 2.99 3.34
BNZ - Classic - 2.29 2.59 2.79
BNZ - Mortgage One 5.15 - - -
BNZ - Rapid Repay 4.60 - - -
BNZ - Std, FlyBuys 4.55 2.89 3.19 3.39
BNZ - TotalMoney 4.55 - - -
Lender Flt 1yr 2yr 3yr
CFML Loans 4.95 - - -
China Construction Bank 4.49 4.70 4.80 4.95
China Construction Bank Special - 2.65 2.65 2.80
Credit Union Auckland 5.45 - - -
Credit Union Baywide 5.65 3.95 3.85 -
Credit Union South 5.65 3.95 3.85 -
First Credit Union Special 5.85 2.95 3.45 -
Heartland Bank - Online 2.50 1.99 2.35 2.45
Heretaunga Building Society 4.99 3.40 3.50 -
HSBC Premier 4.49 2.25 2.35 2.65
HSBC Premier LVR > 80% - - - -
Lender Flt 1yr 2yr 3yr
HSBC Special - 2.25 - -
ICBC 3.69 2.25 2.35 2.65
Kainga Ora 4.43 2.67 2.97 3.13
Kainga Ora - First Home Buyer Special - 2.25 - -
Kiwibank 3.40 3.20 3.50 3.50
Kiwibank - Offset 3.40 - - -
Kiwibank Special 3.40 2.35 2.65 2.65
Liberty 5.69 - - -
Nelson Building Society 4.95 3.20 3.24 -
Pepper Essential 4.79 - - -
Resimac 3.39 3.35 2.99 3.35
Lender Flt 1yr 2yr 3yr
SBS Bank 4.54 2.79 2.99 3.29
SBS Bank Special - 2.29 2.49 2.79
Select Home Loans 3.49 3.34 2.99 3.34
The Co-operative Bank - First Home Special - 2.09 - -
The Co-operative Bank - Owner Occ 4.40 2.29 2.59 2.79
The Co-operative Bank - Standard 4.40 2.79 3.09 3.29
TSB Bank 5.34 3.09 3.29 3.45
TSB Special 4.54 2.29 2.49 2.65
Wairarapa Building Society 4.99 3.55 3.49 -
Westpac 4.59 3.09 3.29 3.39
Westpac - Offset 4.59 - - -
Lender Flt 1yr 2yr 3yr
Westpac Special - 2.29 2.69 2.79
Median 4.55 2.73 2.99 2.89

Last updated: 23 April 2021 8:50am

About Us  |  Advertise  |  Contact Us  |  Terms & Conditions  |  Privacy Policy  |  RSS Feeds  |  Letters  |  Archive  |  Toolbox
 
Site by Web Developer and eyelovedesign.com