Secured exit
Sale agreed before construction starts.
Financing · Forward
Forward funding
The institutional buyer funds the development \u2013 the developer secures the exit before construction begins.
In a forward funding structure the investor acquires the project at an early stage and pays out against construction progress. The developer receives a fixed purchase price and a secured exit; the investor secures a newly built asset at attractive economics.
In a forward purchase the price is agreed up front but paid at completion – the developer keeps the construction financing risk and receives a higher margin in return.
We match developers and institutional buyers, negotiate the purchase agreement, milestone mechanics and guarantees, and coordinate the interim financing where required.
Suitable for
- Developments with a clear institutional exit
- Residential and logistics schemes
- Developers seeking to reduce equity load
- Investors looking for new-build product
- Projects with a defined letting concept
Key facts
- Volume
- from € 15m
- Structure
- funding or purchase
- Term
- construction period
- Payment
- against milestones
- Security
- completion guarantees
- Typical assets
- residential, logistics, offices
Benefits
Why this structure works
Equity relief
Payments during construction reduce the equity requirement.
Price certainty
Purchase price fixed at the outset.
Lower financing cost
Institutional capital instead of expensive junior debt.
Planning certainty
Milestones and cash flows contractually defined.
Repeat business
Successful forward deals typically lead to follow-on mandates.
Process
How we proceed
- Step 01
Product positioning
Assessment of asset, location, letting concept and institutional saleability.
- Step 02
Investor approach
Discreet approach to funds, insurers and asset managers.
- Step 03
Term sheet
Purchase price, milestones, guarantees and quality specification.
- Step 04
Contract negotiation
Purchase agreement, construction obligation and warranty framework.
- Step 05
Construction & handover
Support through milestone payments, monitoring and handover.
From practice
What actually decides the deal
The buyer funds the build
Under a forward funding the end investor pays in instalments during construction. That replaces much of the development facility and takes pressure off equity. In return he wants a say on build quality and lease standards — these rights should be assessed before agreeing the structure.
Pre-letting is the entry ticket
Without signed leases, or at least advanced negotiations, securing institutional interest becomes more difficult. Institutional buyers work backwards from the yield, not from construction progress.
Build costs and indexation
Two years often pass between signing and completion. Split the material price risk contractually or carry it alone. That clause decides the margin more often than the purchase price multiple does.
Completion security
Guarantees, completion bonds and penalties are part of the package. We structure them with the aim of meeting the buyer's security requirements while limiting the burden on the developer's balance sheet.
Questions
What clients ask us most
The structures described are for general information. Availability, leverage, term, pricing, security and other terms depend on the asset, the borrower, the market environment and the specific financing. None of this constitutes a financing commitment.
Also relevant
Other building blocks
Most structures end up as a combination. These are the pieces we mix most often.
Is this the right structure for your project?
Send us your key figures — we respond with a reliable first assessment.