Taking advantage of market opportunities: by capitalising dormant equity

The Swiss property market is constantly changing. Property One Asset Manager brings an instrument into play that responds to the current changes and, in particular, closes the financing gaps that have arisen.

Until now, property investors who wanted to realise a construction project usually turned to traditional lenders, primarily banks. However, the demand for alternative forms of financing has been increasing for years. There are many reasons for this: on the one hand, the increasingly complex situation on the property market is making it more and more difficult to obtain capital. At worst, this leads to temporary financing gaps that jeopardise the launch and completion of projects. The challenge for professional property investors is therefore to be able to seize market opportunities as they arise. These opportunities still exist in the Swiss property market. On the other hand, the local property sector is facing an enormous shortage of living space in the short and medium term: The supply is disproportionate to the increasing demand. Although the market is longing for new projects, so to speak, it lacks the necessary resources and often also the flexibility to seize the opportunities that arise.

Alternative paths to success open up
To remedy this situation, Property One Asset Manager offers first and second mortgages from a single source. The mortgage funds grant loans that are collateralised by mortgage notes. The instrument thus gives professional players in the Swiss property market, such as owners, architects and project developers, access to alternative financing options. The DNA of Property One comes into its own here: the fundamental expertise and experience from the world of property flows into the granting of loans. Thanks to this expertise and in-depth understanding of the market, Property One creates property-based financing solutions for its clients.

The “ONE Real Estate Debt Fund” from Property One
As a first mover and market leader in subordinated mortgage funds in Switzerland, Property One offers financing with a maximum loan-to-value ratio of 80% with the ONE Real Estate Debt Fund. The opportunities offered by subordinated loans from the ONE Real Estate Debt Fund are correspondingly diverse: in addition to bridging financing bottlenecks, the funds optimise the company’s own capital structure and return on equity. As a result, additional equity is freed up for further market opportunities. In addition, Property One is extremely flexible in terms of repayment terms, interest repayments and project progress, as long as there is always a mortgage note on a Swiss property. As an institution subject to FINMA supervision, the company ensures at all times that all framework conditions are adhered to and that all credit enquiries are thoroughly checked and assessed.

A tried and tested tool
Critics of subordinated property loans cite the allegedly high interest costs as an argument against this form of financing. This does not apply to Property One Asset Managers. Subordinated property loans are a flexible catalyst for new market opportunities that have a market price and enable further investment opportunities for borrowers. For this reason, this form of financing established itself years ago as a proven financing tool in Europe, the UK and the USA. Property One’s track record also speaks for itself. Since the launch of the ONE Real Estate Debt Fund, more than CHF 750 million has been raised. There have been no loan defaults during this time. The investments generated a net return of around six per cent per year. The fund has thus established itself as a sustainable business booster for Swiss property professionals.

Further information is available here.

Quelle: Property One