Real estate financing specialist Adelaer has been active in Europe for some time and has now also started with a senior advisor, Wojciech Gallos, in Poland.
Adelaer CCO and founder Daan Reekers: ‘We are discovering more and more alternative routes abroad that can lead to financing. We also see that certain banks are specialized for each type of real estate and offer the best conditions in terms of pricing, term and covenant agreements.
Partly due to the investments we have made in the last three years, we have a fintech platform including a loan management system that makes it easier for us to go internationally lenders and borrowers manage to bring together. We also follow our customer and are now also active in the Balkans. We now have pending applications in Poland and Hungary and this requires investment.
Fintech can bring parties together, but real estate financing is tailor-made and will never be possible without advisors. Ergo, if you want to obtain financing abroad, you need local advisors who know the market, tax specialists, lawyers, notaries and appraisers to ultimately complete the financing successfully. Every country has its own approach and culture.
That is why we are pleased that Wojciech Gallos has also decided to strengthen our team. With its broader experience and proven track record with deals throughout the Balkans, Adelaer is able to better assist our international clients in this area as well.
Who is Wojciech?
Wojciech worked for 7.5 years at ING Poland as an investment banking employee (mainly debt securities) and subsequently as a structured finance employee (mainly real estate loans).
Since 2003, Wojciech has been running an advisory boutique in Poland, mainly focusing on real estate financing for various – mostly foreign – investors in various CEE jurisdictions and to a lesser extent Western Europe. Transactions cover the entire spectrum, from equity to mezzanine and senior debt. In 2023, Wojciech has decided to strengthen its capacity by joining Adelaer as a partner responsible for the CEE market.
Wojciech has extensive experience in various forms of (re)financing and (re)structuring and is known for his ability to combine creativity and finding ‘out-of-the-box’ solutions with high personal and business integrity.
European expansion better for Dutch customers
Daan Reekers continues: ‘Our European expansion has also been deployed to serve our Dutch customers even better. The options are increasing, but the interest surcharges are high. A developer will therefore certainly have to take this into account when designing the construction costs. In London we have been used to significantly higher surcharges for years. Here the lender takes into account the risks he runs. The level of bank financing for developments is also considerably lower. In the Netherlands we have a possible advance payment of 80-90 percent LTC. Internationally this is a maximum of 60 percent LTC. The difference is therefore filled with alternatives, but the interest rate is therefore considerably higher. However, the possibilities are increasing and this also gives the market and developer many more opportunities. I think that this is now also being seen in the Netherlands and that the developer is also willing to pay more for these options.’
Of course, there are developers who approach foreign lenders themselves. Daan Reekers advises against that. ‘That’s quite complicated. You have to regularly sit down with these parties if you want to get the best deal. Banks are quite suspicious. You are dealing with a different culture, they work with foreign loan documentation (LMA) that is different from that in the Netherlands and you also have to ensure good follow-up. If you clearly understand what a bank wants, you can give a much better answer. In those cases it is better to have a party like us assist you,’ says Reekers.
Conditions are more important than the lowest interest rate
Reekers notes that the major Dutch banks that call themselves ‘Real Estate’ financiers are not actually that. ‘Of course we like to work with Dutch banks, but only where they are good at. Dutch banks only finance the part with the lowest risk, the senior loans, and they are certainly a very good party for construction financing, but they do not do everything. We do extra. We can also provide mezzanine (subordinated) loans and equity financing with a higher risk. We look at what the customer needs. The most important for us are the conditions that a lender sets. Where you make clear agreements with foreign banks about what happens in the event of an LTV default, for example, you are at the mercy of the gods at a Dutch bank. We in the Netherlands are used to simply signing the cross where the general terms and conditions include everything that you as a customer certainly do not want. People think that the quotation is leading, but afterwards they discover that this is not the case and then leading has become suffering.’
Main photo: Daan Reekers and Wojciech Gallos.