Investor profile

Like any major investment, diligent research is required to ensure that land banking remains profitable. Environmental considerations, financing, and market changes are all important factors that will dictate the profitability of the venture.

It’s important to consider the land location in purchasing a parcel for land banking. If there is a supply and demand issue in the area you are investing, land banking may be a more profitable venture than in an area with plenty of vacancies.

Real estate investment is rarely an exact science. In making the decision to invest in a land banking scenario, it’s wise to consider all the risks.

• Financing/interest rates: When interest rates rise, the cost to maintain vacant land increases. This may make it more difficult to obtain financing for vacant land, as lenders could view the project as risky.
• Zoning: In developing the land, you’ll need to secure the right permits. This is a notoriously slow process, and any delays could result in further costs.
• Environmental issues: If the land isn’t suitable to the type of development you’re seeking or is generally unsuitable to development – due to natural disasters for example – the investment will not be profitable.
• Market collapse: If the real estate market collapses, values could continue on a downward trend, resulting in a loss for the investor.
• Potential market changes: The intended use of your development will depend largely on the population of the area, the economic conditions, and the local real estate trends. If any of these factors change, your project may no longer be suitable to the area.
• Limited or no regular cash flow: In a land banking scenario, funds are tied up in the land and do not generate cash flow until the land is developed or sold.

Though there are undoubtedly risks inherent in land banking, there are also significant benefits.

• Low maintenance: Unlike a traditional land development investment, land banking has limited maintenance costs, including property tax, insurance, and financing.
• High profitability over time: Provided that the location has been wisely chosen, land banking can be very profitable over time as the land value increases. Once the land has obtained all administrative authorizations linked to a real estate development, profitability could be substantial.

The day you invest in a Land Banking project, we already have a developer who takes the engagement to buy it back at a pre-defined price and invest time, knowledge, and cash in obtaining all the required administrative authorizations. We do so only in jurisdictions with stable and know legal frameworks. We focus on relatively short-term opportunities. We also have banking partners who may provide leverage of around 50% on those transactions.

It’s a crowdfunding method where investors co-finance projects by lending money (under the form of loans) to the borrowers (project owners) in return for interests.

Investing in crowdlending has several risks. These risks can be optimized by spreading risks on multiple investments. But still, these risks should be considered before investing:

The main risk - Borrower default – Happens when the borrower can pay any more interests or can’t give back the invested amount (look for corporate holding guarantee or other type of collateral (1st lien mortgages, etc…).

Not an issue in our case as all transactions are done directly with the issuer.

This crowdfunding investment method holds a lot of advantages such as investments possibilities, flexibility, and risks:

• Allow you to invest starting with a smaller amount
• Spread risk between multiple investments
• Invest with short term duration starting from 4 months to 2.5 years
• Access to big investments (institutional type of transactions) with small capital since many investors invest in the same project.

Depending on the size of the transaction and the regulation in effect for this type of investment (land banking, crowdlending or co-investing), the minimum amount may vary. It is generally starting at CHF 100’000.-

Whether we are developing land, structuring financing or leasing real estate – sustainability is embedded in each of our projects. We are growing rapidly and sustainably because our funds combine positive returns with social value.

According to the International Energy Agency (IEA), buildings account for 30% to 40% of total global final energy demand and over 30% of all energy-related CO2 emissions. Reduction of CO2 emissions and energy savings in buildings is therefore a key environmental issue for real estate companies. Real estate players are therefore expected to integrate environmental considerations into their investment and management decisions and should rely on international certifications that frame the environmental performance of buildings (including LEED and BREEAM). As existing buildings will last for decades to come, improving energy efficiency is a priority to fight climate change.

We have created a Framework to issue Green Bonds to finance or refinance, in full or in part, assets related to Green Buildings, and in that case, the Issuer coherently aligns with its sustainability strategy and commitments and addresses the main issues of the sector in terms of environmental responsibility.

We provide focused and specialist investment solutions to institutional investors, family offices and high net worth individuals in the form of club deals and joint ventures.

• General Market Risk: All markets have ups and downs tied to the economy, interest rates, inflation or other market trends.
• Asset-Level Risk: Some risks are shared by every investment in an asset class. In real estate investing, there’s always demand for apartments in good and bad economies, so multifamily real estate is considered low-risk and therefore often yields lower returns. Office buildings are less sensitive to consumer demand than shopping malls, while hotels, with their short, seasonal stays and reliance on business and tourism travel, pose far more risk than either apartments or office.
• Idiosyncratic Risk: Idiosyncratic risk is specific to a particular property. The more risk, the more return. Construction, for example, will add risk to a project because it limits the capacity for collecting rents during this time.
• Liquidity Risk: Taking into consideration the depth of the market and how one will exit the investment needs to be considered before buying.
• Structural Risk: It relates to the investment’s financial structure and the rights it provides to individual participants. A senior secured loan gives a lender a structural advantage over “mezzanine” or subordinated debt because senior debt is the first to be paid; it has top place in the event of liquidation. Equity is the last payout in the capital structure, so equity holders face the highest risk. Structural risk also exists in joint ventures. In these types of deals, the investor has to be aware of their rights relative to their position in the LLC, which is either a majority or minority holding.
• Leverage Risk: The more debt on an investment, the more risky it is and the more investors should demand in return. Bottom line: real estate investors should inquire about these risks and receive straight answers to be more confident in their investing decisions. Be aware of any investment opportunities that don’t make all risks involved crystal clear.

• Access: Our partners, with deep experience and wide contacts, identified the districts and properties best suited to our strategy. We seek to utilize their expertise and presence to generate attractive returns for our investors in any environment. The team focuses on exclusive investment opportunities that are difficult or impossible to access via listed vehicles.
• Performance: Our deals are generally designed to deliver total return through growth of capital and current income. We invest thematically in high-quality assets, focusing where we see outsized growth potential driven by global economic and demographic trends.
• Risk management: We make it easy to diversify.
• Insight: All investment projects are carefully selected before made available to investors.

The debt ratio on transactions can reach up to 80% of the value of the building. We have different banking partners we are working with on those transactions. We usually use moderate leverage.

We apply an ESG benchmarking framework, from the start of the due diligence through the exit.