We are planning to reorient our construction finance forum from mainly being about sharing insights, to trying to improve how the market functions, with a focus on the following areas:
- Transaction execution. Can we explore where avoidable delays and blockages most often arise and articulate how they might be avoided/mitigated? For example: common approaches to due diligence and/or underwriting, standardised reporting and/or improved approaches to reliance on reports to reduce unnecessary duplication.
- Risk management/transfer. Is there scope for us to help market participants to manage risk more effectively? How does the way risk is allocated under different procurement structures work in practice?
- Risk perception / improving liquidity. Equity investors, back leverage providers, credit committees and financial regulators all regard construction as higher risk – yet housing construction and retrofit refurbishment (in particular) are areas where there is too much weight attached to risk and too little to benefit. Is there useful work to be done in this area? Performance data, which would be valuable, might be difficult to collate – but presumably anything we can do on (a) or (b) above should help. And anything we can do in this area could then drive broader work on tackling viability and liquidity challenges for the delivery of regional housing and broader construction and refurbishment projects.
We will also be reconstituting the forum with a smaller, more focused membership and clearer terms of reference. If you have not previously been involved but would like to be considered, or if you have any comments or questions, please let Peter know.
