BRE Investments is assisting investors participate in this surge in the construction of new homes. This is done by identifying good developers that are seeking additional external funding in order to broaden their project capacity mainly in central London. Typically a developer would provide the site, banking financing, project management and exit strategy and would require the external investor to provide the equity. The amount of equity required per project varies from project to project but on average one would expect this to be in the region of 30% of the gross development value of the project (GDV).
In return the developer would share the profits made on each project with the investor as may be agreed between the parties (usually on a 50/50 basis). Returns have so far been very attractive, encouraging more developers and investors to focus on this segment of the market which is expected to keep on growing for the foreseeable future.
