Investment in development projects

According to Romanian Law investors have the following possibilities:

1. Equity

The investor buys shares of the SPV, i.e. he registers a Special Project Vehicle for the time of the project. 

2. Loan / Mezzanine

The investor grants a loan to the SPV against an interest. The company can apply the interest which is perceived by the Romanian Banks for a Construction Credit. All the amounts which are spent by the SPV are booked as loans granted by the shareholders to the SPV.

This is also valid for the amount which is necessary for the purchase of the land. As soon as the SPV is doing profit, it can pay back the invested amounts to the shareholders. This means that the shareholders can be repaid all the invested amounts approx. after 12 months. In case the SPV is benefiting from a bank loan, the latter will be sovereign.

3. Asset investment

The investor finances a specific asset (a floor or flat) and receives the constructed surface at the end of the project. He becomes the owner of the flat(s). Leader may take over the administration of the surfaces. We will group together as many investors as it is necessary in order buy the land.

As soon as the Project Company (SPV) becomes the full owner of the land plot, it can apply for a Construction Credit with a bank. A detailed documentation of the project has to be established. We have agreements with banks in Bucharest which would grant a credit as per following formula:

(Construction Cost + Price of plot) x 70%

As soon as the Construction Permit is granted to the SPV we can start selling the flats. Consequently the Project is financed at the beginning by the reservation payments which the future flat owners pay, i.e. 30% of the value of the flat. There is such a big demand for newly built flats that a whole building is sold/reserved within 6 months (or less) off the plans. Each project may have a different financial structure which will be explained to the investors when subscribing to it.

Investment in land

We shall group together as many investors as is necessary to buy the land plot. A SPV will be created. A land rezoning project can be envisaged for an investment in land. Leader has good connections with the municipalities in Bucharest and we are aware of certain regions where the land will be automatically changed from agricultural in constructible. In such cases, the investor has just to wait till this change is done and will profit from the price increase.   

Special investment objects

The investor will sign a Commission Agreement with Leader Inv. & Cons. Upon his request we shall help the investor to create his company and guide him for the beginning of this business.