We do, it’s just at a later stage of the project. Each of our development projects go through at least two phases of funding. The first phase occurs at the beginning of the project to fund land acquisition. The second occurs approximately half-way through the project to fund construction.
Hypothetically, the most cost-effective solution would be to acquire all of the funding required for the project from a lender, but this is unviable for two reasons. Firstly, lenders require a deposit before they release a loan, as lenders will only cover a percentage of the value of whatever they are financing. And secondly, using our own working capital as a deposit would restrict the total number of projects that we can simultaneously undergo, which limits the growth of our business and the number of investment opportunities available.
With these factors in mind, the most efficient and cost-effective way to fund a development project is to use investor capital to fund site acquisition and a construction loan from a bank or private lender to fund construction.