Developers set up funds to provide alternative loans for other builders

Mm Capital's Elgin Property Finance aims to provide €300 million of loans, while Northern Irish developer Gareth Graham’s Belfast Commercial Funding has already loaned €34 million to Irish construction projects

It’s not altogether unusual for developers to get involved in funding other developers. Some operators with spare cash would provide funding to others in a return for a ‘percentage of the action’. Picture: Matt Mackey/Presseye

Two Irish developers have established property fund providers in recent months, at a time when risks have increased for development projects. Supply chain problems and labour shortages already had inflationary effects on the sector even before the Ukrainian war impacted energy costs.

Consequently any supply chain delays are adding to the cost of project finance. Longer build times will exacerbate finance costs with interest rates expected to rise in the next 12 months.

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