Print this page

Nedbank Property Finance tackling untapped segments.

Posted On Wednesday, 30 October 2002 10:01 Published by
Rate this item
(0 votes)

Nedbank Property Finance is tackling untapped segments of the property development market in the light of the oversupply in popular commercial sectors.

The oversupplied commercial markets mean that there are fewer viable property development finance opportunities, which places financiers' revenue under pressure. Financiers pursuing new business are discovering less popular but viable markets, including projects in poor areas.

'Potential for developments in underdeveloped nodes is increasingly being matched with experienced and blue chip borrowers,' says Nedbank Property Finance in its latest property market review.

The review refers to a transaction concluded by Nedbank and Sasol Oil, which are working together to roll out 150 new filling stations over the next three to four years for Sasol's black empowerment partner, Exel.Nedcor is financing the roll out of these developments against Sasol's head leases. Up to 15 of these filling station developments, worth about R66m, have been approved this year.

The review also points to Nedbank's involvement in the rolling out of new Score Supermarkets countrywide. Nedbank Property Finance is working with Score to entrench its profile and increase its market share in under serviced nodes. It has approved funding for 15 new Score Supermarket outlets worth a total of about R55m. The Score expansion includes new stores in Vosloorus and KwaThema on the East Rand, and Jabulani in Soweto.

The review says the other marked change in the property development market is a greater interest in residential development projects and certain types of industrial projects.

Data on building plans passed, which are a useful assessment of expected demand for the coming two years, indicate that there is new activity in the markets for freehold residential property and industrial projects.

This runs against a general decline in development patterns on a macro level over the past 12 months. The review refers to SA Property Information Exchange data which show that the best performances were posted in warehousing, and low- and high grade industrial properties last year.

Meanwhile, Nedbank Property Finance is taking a fresh look at the criteria for granting property finance. 'Although each deal is assessed individually, there are key aspects the bank considers when assessing a development opportunities,' says the review.There is a clear recognition that failed property projects tend to share certain characteristics mainly unsustainable cash flows, inexperienced developers, inadequate research and analysis, and non financial risks.

Last modified on Monday, 12 October 2015 23:05
eProperty News

Latest from eProperty News

Related items