Chief Executive Officer, Dolphin Capital Partners
A recognised specialist in raising finance for major resort developments, Miltos launched DCI with €5m of seed capital in the summer of 2005 and completed its admission to trading on AIM in December of that year. Since then it has raised €859m of equityfunds to invest in the residential resort sector in Southeast Europe.
Developers able to tick the right boxes have still struggled to source funding, so what are the options?
“In today’s market environment, lenders of all types are significantly re-evaluating how they calculate and price development risk, while developers are less keen to start construction without securing development financing,” observes Miltos Kambourides, CEO of resort investment company Dolphin Capital. “This has resulted in a funding gap that did not exit before the crisis, but it can bridged by other sources such as: equity capital raisings; payment of construction contracts in equity (project shares) or in assets (lots or residential units); co-investment by the hotel manager; or a higher degree of residential pre-sales.
“These sources require plenty of creativity and in the best case will just bridge the gap; as they will rarely substitute bank financing. Good banking relationships with local banks who understand the project specific risk remain immensely important.” Desperate developers have turned to expensive bridging options like mezzanine finance, paying 20-25% interest on short-term loans to keep projects ticking over.