Riverview Park

CONCEPT DESIGN INITIATION & CO-ORDINATION

Graceland Architects began a process of developing an initial space planning layouts, followed by more detailed floor plans and three-dimensional views using BIM software.

The concept design was shared with the professional consulting team and the construction costs were further refined. The concept design was revised, and a business development began to take shape.

Several other processes were carried out simultaneously at this time including traffic impact assessments, land use management submissions and healthcare operator license applications.

OPERATOR REQUEST FOR PROPOSAL

Part of the hospital development proposal was to approach and award a bid to a private hospital operator for the purposes of operating the hospital.

A bid document was prepared, and several eminent private hospital operator groups were approached to bid for the ability to operate the facility and after an adjudication process a final operator was chosen.

BUSINESS PACKAGE DEVELOPMENT

With all the constituent parts of the project completed, a consolidated pack of all the information was required so that the project could be presented to potential equity investors and debt providers like development finance institutions.

The package required the compilation of all the finalised market analysis documents, financial model, license approvals, operator appointments, concept design and engineering design reports along with the project cost inclusive of land costs, fees, working capital and a proposed cash flow breakdown for the duration of the project leading up to ‘Doors opening’.

The document comprised two volumes: one highlighting the project data itself while the other contained all the appendices like company credentials and other supplementary information.

PRESENTATION TO INTERESTED PARTIES

Over an initial two-day period, the delegation met with several potential investors and debt finance providers to gauge their appetite as well as understand where potential mandates required further alignment.

Securing debt finance is often an easier task than concluding equity investment transactions: investment mandates differ and therefore selecting investors who share similar investment outlooks and horizons was very important in aiming to achieve financial close.

Where the consensus was that the project did not meet the exacting requirements, the project team revisited the development proposal for follow up presentations.

CHALLENGES

One of the main challenges we faced in this project – and it remains a hurdle is the securing of land. The initial plot was earmarked as part of tract owned by one of the potential investors in the project. As time progressed, the landowner confirmed a change to their investment mandate and so the contemplated land was no longer available.

A search for a new, similarly suitable site was undertaken and concluded.

Differing investment mandates can pose a severe risk to the project reaching financial close and can often jeopardise the successful conclusion of the development finance phase of the project.

The creation of special purpose investment vehicles, ownership methods and proportions are intrinsically complicated and require careful consideration.

Lessons Learned

While the project remains in search of financial close, several lessons can be gleaned for future developments.