A new wave of offshore capital has begun flowing into SA's booming property market. The first wave went into direct ownership, mainly in Cape Town's residential market. The second is financing new developments.

Hineil, a Liverpool-based UK property financier, has acquired 60% of Property Partners, a joint venture with two South Africans. The intention is to advance high-risk "mezzanine" finance to property developers.

The 40% shareholders are Mvelaphanda Properties co-founder Stuart Chait, and Javelin Capital, headed by Phil Biden.

The company finances the difference between a project's cost and the bank finance it can raise - usually 70%. This gives the developer 100% finance for his project, for which he gives up a share to Property Partners.

Biden says the consolidation of SA's banking sector has created a gap for more entrepreneurial financiers to provide mezzanine financing. "We leave the credit decision to the primary financier," he says, "and make our investment purely on property considerations."

Nearly R500m in development finance is being formalised only five months after Property Partners was launched, most of it in Cape Town.

Financial Mail