The Poker Nightcap

The property sector apparently has a larger problem spending money than it does in finding it, given that there are too many buyers out there looking for great deals who are coming up empty handed. This is particularly the case for buyers who are on the lookout for prime real estate in London, where foreign purchasers are rushing by the dozen, given the decrease in the value of the pound.

However, at the same time, the banks that own most of the properties that are up for sale do not want to offer the ‘great’ deals that have been the rumour of the recession, because they do not want to take the financial hit when a property boom may be “just around the corner”.

Thus, even after businesses are able to get funding for a new purchase, they have a hard time actually making the purchase, which is true in the case of Great Portland Estates, which was able to raise about £165m but is forced to take a rather roundabout path to secure the property it has in mind.

In order to get two properties that are found in Central London including one in the West End GPE must pay the debt that is owed on them by past lender Eurohypo, and had to commit another £88m to the actual development of the properties. After that, the equity of the sites must be split with the Dubai Company Istithmar, Thus, while the company was able to make a purchase, it certainly was not one designed for ease.

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This entry was posted on Friday, November 20th, 2009 at 7:21 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.