Innovative financing models for Public Private Partnerships (PPPs) in real estate development

Abstract

There is a momentum for places to generate new initiatives to help leverage private sector finance for real estate development, as well as meet the increasing demand for modern communications and services. Moreover, from the public sector there has been a greater use of financial instruments and mechanisms globally. Innovative finance for real estate development involves non-traditional forms of funding through private mechanisms, solidarity mechanisms, public-private partnerships mechanisms, and catalytic mechanisms. However, innovative finance for real estate development is not to be viewed as an alternative to traditional forms of finance but should been seen as complementary. Furthermore, innovative financing of real estate development are those measures providing financial support to address one or more policy objectives through the use of loans, guarantees, equity or quasi-equity investment, or other risk-bearing tools – that can be combined with grants and involve risk-sharing with financial institutions to boost investment in large infrastructure projects. Innovative finance approaches to development and PPPs have been increasingly used in the real estate and property industry. Moreover, the intense pressures from accelerating growth worldwide require innovative funding mechanisms to support sustainable development. In real estate development, innovative financing mechanisms have often been used in PPPs that provide transport and energy infrastructure.