Capitalising on the Booming Aircraft Leasing Industry
The aircraft leasing industry is experiencing robust growth despite economic, geopolitical, and environmental uncertainties. This article highlights key trends in the industry, including private placements, lease rate factors, alternative lending solutions, investment-grade lessors, joint ventures, ICAV platforms, and aviation collateralized loan obligations (CLOs). These developments present opportunities for investors and players in the aviation sector to navigate challenges and maximise returns.
Amid difficulties accessing traditional ABS markets, airlines and lessors are turning to privately-placed deals. Although private debt investors may be costlier, this approach offers flexibility in terms and structures, faster turnaround times, and reduced execution risk. A recent example is the US$303.7 million MAST 2022-1 and MAST 2022-1 USA privately placed ABS, backed by Marathon Asset Management and serviced by Airborne Capital Limited.
Lease Rate Factors:
Discussions within the industry highlight the need for lease rate factors to rise with interest rates to attract investors back to the ABS market. Some lessors are witnessing upward movements in lease rates for new and used aircraft due to undersupply, rising interest rates, and certain lessors withdrawing from the market.
Alternative Lending Solutions:
Aviation-focused alternative lenders and credit funds, such as Ashland Place, Muzinich, Castlelake, and Volofin, are playing a significant role in commercial aviation lending. These lenders offer flexible financing options, catering to mid-tier lessors and airlines that struggle to access bank funding. Their nimbleness and regulatory flexibility make them competitive players in the market.
Investment Grade Lessors:
While traditional aviation lenders may have reduced appetite at the mid-tier lessor level, investment-grade lessors continue to attract significant financing. Recent examples include a US$1.7 billion syndicated facility to SMBC Aviation Capital and Air Lease Corporation’s successful public offering of senior unsecured medium-term notes.
Large private equity firms are establishing joint ventures with established and newly formed leasing and aircraft investment management companies. These platforms provide quick and flexible capital solutions, assembling portfolios of aviation assets across various sectors. Notable joint ventures include the Gilead Aviation platform serviced by Aercap and the ST Engineering/Temasek cargo conversion platform (Juniper).
Aviation investment platforms often use unregulated investment vehicles. However, the use of Irish Collective Investment Vehicles (ICAVs) as regulated fund structures is gaining popularity. ICAVs offer tax efficiency, regulatory compliance, investor protection, and a robust structure for aviation investments.
The participation of private equity in commercial aviation lending has led to increased interest in collateralised loan obligations (CLOs) for aviation loans. These aviation loan CLOs provide investors with diversification opportunities and enable private equity sponsors to raise funds or finance exits.
As stability returns to the market, increased funding availability offers prospects for growth in the aircraft leasing industry. Investors and industry players can capitalize on these trends to seize opportunities and achieve favorable returns.
We are currently raising funds for an aircraft leasing company. If you would like to know more please get in touch via phone or email. With an existing order book, returns are expected to be between 30-70% PA.
In the current economic climate, investors are looking for secure investment opportunities that can provide stable returns while mitigating risks. Property development and renewable energy are two sectors that offer potential for long-term growth, and combining them can provide an even greater opportunity for secure investments. In this blog, we will explore how property development and renewable energy can help investors find secure investments in the current climate.
Property development can provide investors with a secure investment by offering stable returns over the long term. As the population grows, the demand for housing increases, creating opportunities for property developers. By investing in property development projects, investors can benefit from steady rental income, capital appreciation, and tax advantages.
To mitigate risk, investors can focus on well-located properties with high rental demand, ensuring a steady flow of income. Additionally, investing in property development projects with a strong Gross Development Value (GDV) can help ensure profitability and reduce risks associated with underperforming projects.
Willow Rivers Wealth offers a range of property development investment opportunities in prime locations across the UK. Our projects have strong GDVs and are designed to deliver consistent rental income and capital appreciation. Learn more about our property development opportunities here.
Renewable energy is another sector that offers potential for long-term growth and secure investments. As the world transitions towards more sustainable sources of energy, the demand for renewable energy is increasing, creating opportunities for investors.
Investing in renewable energy projects can provide stable, long-term returns through the sale of electricity or energy credits. Additionally, renewable energy projects can benefit from tax credits and government incentives, reducing risks and increasing returns.
Willow Rivers Wealth also offers investment opportunities in renewable energy projects. Our portfolio includes solar, wind, and hydro energy projects, providing investors with a diverse range of renewable energy investment options. Learn more about our renewable energy opportunities here.
Combining Property Development and Renewable Energy
Combining property development and renewable energy can provide even greater opportunities for secure investments. Property developers can integrate renewable energy systems into their projects, reducing energy costs, and increasing the value of the properties.
Investors can benefit from the stable returns of property development projects, while also investing in renewable energy, creating a more diverse and secure investment portfolio. Additionally, property development projects with renewable energy systems can benefit from government incentives and tax credits, reducing risks and increasing returns.
Willow Rivers Wealth’s property development projects often incorporate renewable energy systems, providing investors with a unique opportunity to invest in both sectors. Learn more about our combined property development and renewable energy investment opportunities here.
Investing in property development and renewable energy can provide secure investments in the current economic climate. By investing in well-located properties with high rental demand and strong GDV, investors can benefit from steady rental income and capital appreciation. Additionally, investing in renewable energy projects can provide long-term, stable returns, reducing risks and increasing returns. Combining these two sectors can create even greater opportunities for secure investments while contributing to a more sustainable future.
At Willow Rivers Wealth, we specialise in property development and renewable energy investments. Contact us to learn more about our investment opportunities and how we can help you find secure investments in the current climate.
The Gross Development Value (GDV) is a crucial consideration for any property developer looking to build a residential property portfolio. It represents the total value of a development project and plays an essential role in assessing the profitability and feasibility of a project. In this blog, we’ll explore the importance of GDV in developing residential property portfolios, with a focus on the advantages of having a local government council buy the final units. We’ll use the south-east of England as an example to illustrate the points.
GDV and Residential Property Portfolios
The GDV is an essential metric for property developers, and it plays a critical role in developing a residential property portfolio. This is because it provides an estimate of the total value of the project, which helps developers determine the viability of the project and the potential return on investment. By understanding the GDV of a development project, property developers can evaluate the costs and risks associated with the project and make informed decisions on whether to proceed with the development or not.
Furthermore, the GDV also helps property developers determine the selling price of the units within the development. This information is crucial for developing a residential property portfolio as it enables developers to price the units effectively and remain competitive in the market. Understanding the GDV can help developers to optimize their returns by pricing units appropriately, avoiding overpriced units and ensuring that all units are sold or rented out within a reasonable timeframe.
Advantages of Having a Local Government Council Buy the Final Units
In the south-east of England, local government councils are increasingly looking to purchase units in new residential developments. This trend has several advantages for property developers looking to build a residential property portfolio.
Firstly, having a local government council buy the final units can provide developers with greater financial security. Local councils are often stable, long-term purchasers who can provide developers with a guaranteed sale for the remaining units in the development. This can help developers to manage their cash flow and ensure that the development project is completed on time and within budget.
Secondly, selling units to local government councils can help developers to meet their affordable housing quotas. Many local councils require developers to provide a certain percentage of affordable housing units in new developments, and by selling to the council, developers can meet these requirements without compromising their profit margins.
Thirdly, selling units to local government councils can provide developers with an additional source of demand. This can help developers to sell units quickly and efficiently, reducing the time and costs associated with marketing and selling units on the open market.
In conclusion, the GDV is a crucial metric for property developers looking to build a residential property portfolio. It provides developers with an estimate of the total value of a development project, helping them to determine the viability and profitability of the project. Furthermore, in the south-east of England, selling final units to local government councils can provide developers with several advantages, including financial security, meeting affordable housing quotas, and additional sources of demand. By understanding the importance of GDV and the advantages of selling to local government councils, property developers can optimize their returns and build successful residential property portfolios.
Investing in property development projects can be a lucrative venture for investors, and understanding the Gross Development Value (GDV) is an essential part of evaluating the potential return on investment. Here are some of the advantages for investors in property development projects:
Potential for High Returns: Property development projects have the potential to provide high returns on investment, especially when the project is successful and achieves a high GDV. The GDV provides an estimate of the total value of the project, which can help investors evaluate the potential return on their investment.
Mitigating Risk: By understanding the GDV, investors can assess the level of risk associated with a property development project. This can help investors to make informed decisions about whether to invest in a project or not. Additionally, investors can assess the level of risk by considering other factors such as location, demand, and the reputation of the developer.
Diversification: Investing in property development projects can provide investors with diversification, which is essential for managing risk in a portfolio. By investing in different projects, investors can spread their risk across different markets and reduce the impact of any losses in a single investment.
Access to New Markets: Investing in property development projects can provide investors with access to new markets that they may not have been able to access otherwise. This can provide investors with opportunities to diversify their portfolio and take advantage of emerging trends in the property market.
Control: Unlike investing in traditional property assets such as buy-to-let properties, investing in property development projects can provide investors with greater control over the investment. Investors can work closely with developers to manage the project and ensure that it is completed within budget and on time.
In conclusion, investing in property development projects can provide investors with several advantages, including high potential returns, diversification, access to new markets, and greater control over the investment. By understanding the importance of GDV and other factors that impact the success of a property development project, investors can make informed decisions and build successful property portfolios.
The UK property market is notoriously difficult to navigate, with high costs, complex regulations, and a shortage of affordable housing. For those looking to enter the market, there are two main options: to start a property development project from scratch or to joint venture (JV) with an existing developer. While both options have their advantages, there are several compelling reasons why JVing with an existing developer is the better choice for UK property development.
Entering the UK property market can be a challenging task for anyone. However, JVing with an existing developer can provide access to valuable expertise. An experienced developer will have a wealth of knowledge regarding the local market, contacts with suppliers and contractors, and a deep understanding of the complex regulatory landscape. Trying to build this expertise from scratch is time-consuming and costly, and mistakes can be costly. A JV partner can provide a valuable shortcut to success.
Another benefit of JVing with an existing developer is the sharing of risk. Property development is a high-risk business, with a significant amount of capital and time invested in each project. By JVing with an existing developer, you can share this risk, minimizing your exposure to financial losses. Sharing risk with a partner also provides an opportunity to leverage each other’s strengths, expertise, and resources to ensure project success.
JVing with an existing developer can also help to reduce costs. An experienced developer will have established relationships with contractors and suppliers, as well as access to financing at favorable rates. They may also have economies of scale that can reduce the costs of materials and labor, which can be particularly beneficial when working on larger projects.
Developing a property from scratch can be a complex process involving numerous stakeholders, including architects, contractors, lenders, and regulatory bodies. With a JV partner, many of these processes will have already been streamlined and optimized, reducing the time and effort required to get a project off the ground.
Lastly, JVing with an existing developer can also provide improved exit options. By partnering with an established developer, you may be able to sell your share of the property development project more quickly and easily, freeing up capital to invest in other projects or diversify your portfolio.
In conclusion, JVing with an existing developer is the better option for UK property development. It provides access to expertise, reduces costs, streamlines processes, shares risk, and offers improved exit options. By working with a JV partner, you can leverage their knowledge, experience, and resources to achieve success in the competitive UK property market.
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