We have extensive experience of acting for investors, developers and funders on forward funding and forward sale transactions. Although transactions of that nature can often be more complex than the standard development scenario, we appreciate that they can deliver substantial commercial advantages for all parties and our team will ensure that you are adequately protected whilst maintaining a commercial approach to ensure that the legals elements are dealt with quickly and in a cost-effective manner.
Having worked for such a breadth of clients on forward funding and forward sale transactions, we understand your commercial drivers.
Structured correctly, forward funding transactions can deliver a substantial SDLT saving which will benefit all parties. For investors, ideal assets are not always readily available and where they are there will be significant competition to acquire them. Forward funding allows an investor to create a newly completed asset, tailored to its investment criteria, which delivers a lower yield than might otherwise be possible to reflect the additional risk of the development process.
Developers are able to package up a development and have the certainty of knowing up front that they have funding throughout the project, giving significant cash flow advantages. They will often also negotiate a profit payment which acts as an incentive to deliver the project on time and at the agreed cost.
Tenants and investors are able to tailor a development to meet their needs and maintain involvement throughout the development process.
Trowers & Hamlins can assist you in identifying and mitigating risk areas, such as getting the tax right; making sure the complex suite of documents fit together properly and that there are no gaps; and considering appropriate triggers for payment.
In addition to forward funding, we also have extensive experience of forward sales. We understand that forward sales represent a very different risk profile for investors and in most cases they mean that the consideration is not payable until there is certainty that practical completion has occurred. From a developer's perspective they will look for a higher return and will have the certainty that, provided they deliver on time, they are able to sell the development site at an agreed price. Forward funding and forward sales can be complex, but our commercial approach will assist you in navigating the complexities and mitigating the risks and, most importantly, getting the deal done on budget in the agreed timescale.
- Extensive experience acting for all parties involved in forward funding
- Helping to identify and mitigate risk
- Helping to unlock development schemes