Arc & Co.’s Julian King has recently written a fascinating article aimed at developers attempting to navigate the uncertain times that Covid-19 has created.
In the article, which can be viewed by clicking here, Julian highlights the issues facing portfolio developers/investors and provides some diversification options.
Here is an excerpt from the article:
At the time of writing this article, the world is experiencing a seismic shift in its ability to function under normal conditions, with all our lives having been changed at a moment’s notice due to the threats posed by the COVID-19 virus.
While the long-term effects of this mayhem on the property market remains an unknown, many construction sites are closed or under pressure to close with the availability of materials becoming more difficult due to builders’ merchants not being open. This pressure on the supply chain will undoubtedly have an effect on the practical completion of projects and has resulted in a delay to the sales process – further compounded by the Government’s instructions to pause property transactions until it is safe to proceed.
Lenders and developers will have to work together to extend debt facilities, so they are in-line with the anticipated construction and sales programme. But what if a developer has already reached practical completion and maybe even completed some sales? What are the other potential options available? The answer to this question depends on the corporate strategy of the developer, which may change from a ‘build to sell’ scenario to a ‘build to hold’ one. Is the developer implementing a strategy for the short, medium or long-term? Perhaps it is a mixture of all three to blend risk and reduce market exposure, which crystallises immediate gain with long-term passive income.
VIEW THE ARTICLE BY CLICKING HERE OR ON THE IMAGE
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