Development needs finance: (i) to cover the development period; and (ii) to purchase the finished development and hold it as an investment. The former is usually referred to as a ‘short-term’ or ‘bridging’ loan, and the latter as a ‘long-term’ or ‘funded’ loan. There are thus usually three main participants: (a) the borrower, that is, the developer (who may also be the long-term holder of the equity interest); (b) the provider of short-term finance, such as a joint-stock or merchant bank; and (c) the lender of long-term finance, usually an institution such as an insurance company or pension fund.
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