Property
Issue No. 40 - April/ /
Relationships key to project delivery
For developers and banks, working together on complicated projects can create some tension.
Developing a strong partnering relationship can negate those stresses and ensure project goals and timelines are met as seamlessly as possible.
BankSA General Manager Commercial and Regional Business Banking, Lindsay Hick, says a strong working relationship between a developer and their bank had become even more critical in recent times as tenant timeframes tighten up and Green Star building designs emerge.
“These types of projects often have high tenant expectations and project teams must successfully manage the design process to ensure these expectations and timeframes are met,” Lindsay says.
“Failure to achieve the timelines and design plans may have an effect on pre-leasing, rental value and sales potential for the property.”
He says commercial investors, both large and small, are working on finer yields with little room for error in the delivery.
“A solid and close relationship with a bank can be critical to achieve good outcomes in such a tight project,” he says.
He says the reality is developers and banks are looking to achieve the same thing.
“Everyone is happy when a project is successfully delivered on time, within budget and the developer and bank have achieved an adequate return for the risk and capital,” he says.
“To achieve this mutual goal, when looking for construction funding a good relationship between the developer and the bank should be on the top of the list.
“Banks are more competitive than ever on pricing and the developer’s true focus needs to be on the bank’s ability to deliver.”
Lindsay says a developer should look for a bank with a team that has the necessary experience to handle a wide range of issues.
“A dedicated team with the appropriate experience and knowledge should include an experienced legal and valuation team,” he says.
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