earticle

영어

Since the Asian financial crisis, the advance of real estate development financing, such as the introduction of asset-securitization and fund investment vehicle, has provided the benign environment where financial investors can actively participate. Despite this development, construction companies still bear the final responsibility by providing payment guarantee for project finance loan of developers. The research of this paper shows that currently, the most critical factors of local real estate financing are payment guarantee by construction companies and collateral value. However, in the near future, it is anticipated that project profits, developers’ financial health, and business capability would be the most important part. This study also shows that financial investors are expected to play the most significant roles in the real estate development finance. But they are facing realistic problems such as their internal risk-averse attitude and external legal barriers caused by investment restrictions and asset soundness that should be met by them. Therefore, it is argued that the current practice of project finance should be changed so that financial investors participate in development projects based on project profits instead of depending on contractors’ guarantee.