Ways of raising capital in modern conditions

08.12.2009 11:33
Начальник отдела финансовых рынков и инвестиций компании Jones Lang LaSalle Ukraine, Герман ПаникарAbout the tools of capital, the main trends of the capital market in Europe and Ukraine, real estate investments, changes in capitalization rates and the main trends in the debt capital markets was discussed in the report of the Deputy Director, Head of Financial markets and investment company Jones Lang LaSalle Ukraine
Herman Panikar at the Second All-Ukrainian bizes investment forum "Investments in real estate and construction - 2009", held June 2-3 in Kiev.

According to Mr. Panikar, tools to attract capital may act as own funds (rental income, sale of land, sale of real estate, attracting partners), and borrowed funds.
Ways of raising capital declined significantly during the crisis due to reduced volumes, or complete cessation of lending.

Major trends of the capital market in Europe:

• Only the "prime": The focus of investors focused on the highest-quality assets in the most liquid markets
• Comparative price: Investors look immediately for whole regions and selected those objects / countries where the decline in prices was the largest.
• Quality of the lease and tenants: The majority of active investors interested in buying assets that yield a stable, long-term income
• No additional risk premiums: Buyers are not willing to take the risk of filling vacant space, etc.
• The market for debt capital will be severely limited in 2009 and 2010.
• Reducing the volume of transactions: Because of limited resources and to diversify risk, investors will be increasingly combined in pools, especially when it comes to large deals.

Requirements for ready-estate:

• Stable cash flow:
• Lease of 3 years
• A good part of the tenants
• Use the correct concept
• Convenient location
• First, the objects of commercial and office real estate
• In general, Kiev. For commercial real estate - cities.
• Attractive price. Capitalization rate - from 18-20%.

Requirements stroyaschmsya estate:

High stage of readiness (80%)
• Use the correct concept
• Convenient location
• A high percentage of preliminary agreements:
• First, the objects of commercial and office real estate
• In general, Kiev. For commercial real estate - City-millioniki.
• Minimum 50% share
• Favorable conditions for the occurrence

Land requirements:

• Ownership
• Excellent location
• The correct form
• Under the commercial real estate or luxury housing
• Lack of competition
• Low cost
• Additional requirements:
• Developed concept
• Received all TU

Major Trends

A few banks are willing to consider the possibility of granting loans, but only for the old, reliable clients
• Significant reduction in lending
• Significant increases in interest rates
• Termination of the project funding
• A very conservative approach to real estate value
• Decline in LTV

According to Herman, improving conditions for debt financing is unlikely in the next 12 months.
Victor Kovalenko

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