Introduction
Raising cross-border financing against income-generating real estate—particularly in Europe, for deployment in a high-growth jurisdiction such as the UAE—requires precision, preparedness, and credibility. This article presents a full walkthrough of the process, focusing on the documentation needed and the execution steps involved, without revealing client-specific data.
Whether you are seeking bridge debt, mezzanine capital, or a project-linked facility in Dubai or Abu Dhabi, this article outlines what institutional and private-credit lenders expect when dealing with Raising Capital with Real Estate Collateral. We break it down into categories such as corporate compliance, asset-level due diligence, financial records, and project-related documentation. We also include practical steps and sequencing tips to compress the funding timeline and strengthen your bargaining power.
Chapter 1: Understanding the Structure of Real Estate–Backed Financing
Real estate-backed fundraising is generally structured as one of the following:
- Senior secured bridge loan – typically 12–24 months in tenor, secured by a first mortgage on the asset.
- Mezzanine financing or preferred equity – subordinated to existing debt but cheaper than equity dilution.
- Cross-border credit facility – structured via offshore SPVs to provide local disbursement flexibility.
- Monetisation of financial instruments – including Standby Letters of Credit or Bank Guarantees.
These structures may be used to fund new developments, refinance existing debt, or inject equity into unrelated operating businesses. Regardless of purpose, lenders will require a detailed and verified information package.
Chapter 2: Corporate & Compliance Documentation
To meet anti-money laundering (AML), Know Your Customer (KYC), and regulatory requirements, sponsors must supply a full set of corporate documents for all relevant entities and individuals.
Required Documents:
- Certificate of Incorporation / Trade Licence
- Articles of Association and Shareholder Register
- Passport and Proof of Address for UBOs and directors
- Wolfsberg Questionnaire or equivalent AML form
- Declaration of Non-Sanctions / Non-PEP Status
Common Issues:
- Documents not being bilingual or officially translated
- UBO chains not clearly documented
- Expired or uncertified ID documents
Pro Tip: Ensure all constitutional documents are less than 3 months old or obtain a certified extract.
Chapter 3: Property Title & Legal Due Diligence
Title verification and legal control over the property are prerequisites to securing a mortgage or pledge.
Required Documents:
- Land Registry Extract (Grundbuch) – showing ownership and encumbrances
- Purchase Deed (Notarised)
- Site Plans and Cadastral Maps
- Current Mortgage Statements / Facility Agreement
- Security Documents – including land charge and rental assignment
Lenders will perform title checks and may request a notary draft for future mortgage registration.
Chapter 4: Independent Property Valuation
An up-to-date appraisal is one of the most heavily scrutinised documents.
Valuation Requirements:
- Conducted within the last 3 months
- Performed by a RICS or HypZert-certified surveyor
- Includes valuation methodology and assumptions
- Includes sensitivity analysis and professional indemnity cover
The valuation helps set the Loan-to-Value (LTV) ratio and informs the credit decision. Any renovations or development upside must be separately analysed.
Chapter 5: Leasing and Rental Income Due Diligence
Rental income serves as the basis for debt service analysis. Lenders need to understand tenant mix, lease terms, and rent collection history.
Required Documents:
- Live Rent Roll (Excel)
- Standard Lease Templates
- Copies of Top 5 Lease Agreements
- Summary of Indexed Rents or Break Clauses
Ensure the rent roll aligns with the valuation and financial statements.
Chapter 6: Technical, Environmental & Insurance Documentation
Whether the asset is newly built or refurbished, its technical and regulatory compliance must be proven.
Required Documents:
- Bauabnahme Certificates – showing completed construction acceptance
- Energy Performance Certificates (EPC) – confirming energy class
- Fire Safety and Structural Reports
- Building Insurance Policies – showing sum insured and named lender as loss payee
Refurbished properties must show warranties and timelines for major works.
Chapter 7: Financial Statements and Tax Compliance
Financial strength and historic cash flows are critical for underwriting.
Required Documents:
- Audited Group Financials (Last 2 Years)
- YTD Management Accounts (Excel + PDF)
- Tax Assessments and Filings
- Loss Carryforward Schedules
Where multiple SPVs exist, consolidated and SPV-level reports should be provided.
Chapter 8: Existing Debt and Encumbrances
Understanding current liabilities is essential to structuring any new capital injection.
Required Documents:
- Facility Agreements for Existing Loans
- Security Package (Land Charges, Pledges, Assignments)
- Amortisation Schedule
- Compliance Certificates (e.g. LTV / DSCR tests)
- Payoff Letters or Consent to Refinance
Subordinated debt or shareholder loans must be fully disclosed.
Chapter 9: Use-of-Proceeds and Development Pipeline
Where funds will be redeployed (e.g., to a UAE real estate project), a clear project dossier is required.
Required Documents:
- Project Business Plan – timeline, funding needs, exit strategy
- Sources & Uses Model (Excel)
- Land Purchase Agreement / Development JV Contract
- Consultant Cost Report or QS Estimate
- Planning Permissions / NOC Letters
Banks may request registration under RERA and a project escrow structure in the UAE.
Chapter 10: Execution Roadmap and Timeline
An efficient process requires sequencing and discipline. Below is a typical execution timeline:
Week 1–2: Document Collection and Data Room Setup
- Gather all items from the checklist
- Convert to English where needed
- Store in a structured, cloud-based data room
Week 3: Lender Teaser and Term Sheet Round 1
- Circulate a blind teaser to selected lenders
- Gather initial interest and term sheets
- Shortlist 2–3 parties for deep due diligence
Week 4–6: Due Diligence and Credit Approval
- Site visits, interviews, DD reports
- Confirm legal enforceability in both jurisdictions
- Lock in FX hedging if needed
Week 7–8: CP Satisfaction and Documentation
- Intercreditor negotiation (if mezz present)
- Draft and finalise facility documents
- Obtain Board Resolutions and Notary Certification
Week 9–10: Drawdown and Disbursement
- Execute security documents
- Lender registers mortgage or pledge
- Funds are disbursed to the defined SPV or escrow account
Conclusion: The Key to Success is Preparation
Whether you are structuring a cross-border debt transaction or unlocking equity via real estate collateral, the depth and quality of documentation is the difference between a 4-week and a 4-month process. Well-prepared sponsors get better terms, lower pricing, and access to a broader pool of institutional capital.
Establish a clear folder system. Collect, translate, and update documents before engaging lenders. And remember—regardless of deal structure—clarity, consistency, and compliance are what credit committees value most.
If you’d like a lender-grade data room template or help preparing an Information Memorandum, our advisory team would be glad to assist.
