For investors, there is FGH investment/portfolio finance. This product
enables the small to medium-sized investor to build up and operate a realistic
property portfolio. An important component of our service is our technical,
legal, fiscal and other knowhow which we are able to bring to bear.
The complexity of this market is considerable, particularly as a consequence
of the many interventions by central and local government, such as zoning,
leasehold conditions, rent control legislation and residence permits.
Many potential investors would be scared off by this amount of regulation,
so that a finance package which guarantees the backup of specialist expertise
definitely meets the requirements of this target group.
For real estate developers FGH offers its project finance package, a product
which helps to get the construction work under way more rapidly.
This finance package is aimed at the development of realty which is intended
for rental, but the property concerned does not have to be fully leased before
the funds can be advanced. Nor does the ultimate investor have to be known
at that point in time. An essential part of the service is the input of our
expertise and experience, especially in the architectural/construction and
commercial fields. This input regularly leads to technical improvements to
the property and/or lower construction or operating costs. The support
function performed by FGH during the project realization phase means that
the construction work is carried out in accordance with the plans and that
quality is assured.
An important growth segment concerns the renovation market and the
redevelopment of existing real estate; this growth stems from the increasing
interest in high-grade properties on prime sites, which are in short supply.
We are active in this market by building on our knowledge of and experience
with the financing of construction projects.
For business users of real estate we are able to offer finance facilities which
are perfectly adapted to their requirements. The basis of the finance remains
the property on which it is secured, but the prospects of the company
concerned also play an important part. We are fully equipped to appro
priately support and advise our clients in the commercial market.
Production in the professional sector showed a slight rise in 1987.
The increase was mainly due to growth in the number of construction and
property development loans granted. In addition, our field of activities was
expanded to include non-profit institutions like housing associations and
hospitals.
In the retail market we initially had success with our Deposit Mortgage and
Capital Mortgage, two tax-efficient products which attracted considerable
interest on the part of the consumer. Production for the first six months was
running well above the level for the equivalent period in 1986.
Then, entirely without warning, the Secretary of State for Finance
announced that interest which was added to the principal of a mortgage
would no longer be tax-deductible, which destroyed the fiscal attractiveness
of both types of mortgage. Current contracts will be honored by the tax
