New fund to target distressed real estates

A private limited company, Firmcare Construction, is in the market to raise funding for investment in real estate assets showing early signs of distress with the aim of re-designing the asset and develop residential or commercial property in demand.

Firmcare Construction Private Limited is a development company registered in 2022 that seeks to “revolutionise the way housing projects are delivered to the African Market”.

To do this, Firmcare Construction, seeks to raise US$2,5 million through issuing of a bond with a face value of US$1 000, but at a discounted price of US$833,33.

The bond has a two-year maturity period with a target YTM of 9,5 percent subject to negotiations.

“We seek out institutional investors looking to reduce their currency risk in the short to medium term.

“Our value proposition is ideal for small, distress funds looking to build capital.

“The fund will pay returns in USD or at the prevailing rate where agreed,” reads part of the investment proposal.

Firmcare Construction says it will achieve its returns by picking real estate assets showing diminishing capacity to provide liquidity to owners.

The construction firm says it will buy these properties at a discount to their eventual value “because the owners may not have the expertise and patience to go through a lengthy development or restructuring process”.

It said the investment strategy is also attractive to Pension Funds that are in distress as they can invest in cash or in specie for a 12-24 month horizon in which they can unlock liquidity and interest income from the bond.

“This offering is a private placement due to the sophistication of the investment strategy,” reads part of the investment proposal seen by Business Weekly.

Firmcare Construction already has a pilot project at 136 The Chase located in Mount Pleasant, Harare.

The pilot project is made up of thirteen semi-detached townhouses which are now 70 percent complete and are on the market ahead of completion in March 2024.

Already on the cards are plans to develop fourteen units sitting on 1,3 hectares of land in Hogerty Hill and 88 apartments in Greendale, among others.-ebusinessweekly