In Sweden, there are a large number of exciting real estate projects that cannot be realised due to lack of funding while many investors are looking for attractive investment opportunities. This, in combination with a widespread housing shortage, renders traditional investment models insufficient.
A property developer is planning a project with a total cost of construction of 100 million SEK. The bank grants a loan of 60 million SEK. The remaining 40 million must, therefore, be funded by the property developer through equity or junior (subordinated) loans, which is challenging for many property developers.
At Tessin’s platform, the developer gets an opportunity to find investors who are willing to cover the financial gap that exists between the bank's loan and the total cost of construction, in exchange for a certain rate.