Veda Capital

Property Financiers, Underwriters and Private Equity Specialists

What we do

At Veda Capital we create property finance opportunities that are not available through banks and other financial institutions. We are able to offer competitive, commercially-viable solutions to investors, developers, builders and other property clients.

Property Finance

Veda offers property finance for residential, commercial and development assets.

Finance is offered on land subdivisions, residential dwelling construction, multi-unit dwelling construction, apartments, residential, commercial and industrial buildings.

Unlike banks, we are often able to dispense with standard lending requirements such as pre-sales, quantity surveyor reports and valuations.

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Underwrites

Veda provides underwrite services to developers who are trying to secure mainstream funding for their projects.

Typically, banks require a specific number of pre-sales to consider development funding.

Pre-sales can be difficult and time-consuming to obtain. Often the developer may have to provide discounts to obtain the necessary pre-sales. It is often preferable not to discount, as it sets the benchmark for future sales and can have an adverse effect on prices once the development is complete.

An underwrite is often a great option that a bank will accept in lieu of presales.

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Private Equity & Joint Ventures

Sometimes a developer comes across a property opportunity but has little or no equity to put into the project. This makes the project unfundable through a bank or other financial institution.

Rather than passing up on the opportunity, it might make sense to enter into a joint venture with a partner, who can provide the requisite equity and expertise to undertake the development.

The principals of Veda Capital have a strong history and reputation of successful joint venture arrangements.

Please call us on 09 520 3660 to discuss further.

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Who we are

The principals of Veda Capital have been dealing in property and property finance solutions for more than 25 years. They have an excellent reputation in the market for providing innovative solutions and being professional in their dealings with clients.

profile

Hemat Patel BCom

Director

Hemat has over 42 years of business experience. He graduated from the University of Auckland in 1972 with a Bachelor of Commerce in accounting and returned to Fiji where he started a retailing and wholesaling business – RB Patel Group Limited (RBPG) - with an initial paid up capital of $4,000.

Hemat spent over 30 years working with RBPG. Today, the company has a turnover in excess of FJ$100m, employs over 600 staff and is listed on the South Pacific Stock Exchange with a market capitalisation of $75.6m.

Hemat’s shares in the business were sold in 2003 and he is now based in New Zealand. While in Fiji, Hemat also served as a director of Air Pacific from 1982 - 1983.

profile

Adarsh Patel BComLLb

Director

Adarsh has a diverse background in finance, property and business. As an executive director of ASAP Finance Limited (a sister company to Veda Capital) which has been in business since 2004, he has been involved in funding hundreds of millions of dollars of property loans.

Adarsh has also personally owned, managed and developed over $100m in property. This experience is invaluable in understanding clients’ funding requirements and in assessing the merits of each property opportunity

Adarsh holds a Bachelor of Commerce and Law degree from Auckland University and has previously worked at KPMG, Merrill Lynch, Morgan Stanley Dean Witter and as a director of RB Patel Group Limited.

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Darpan Patel BCom(hons)LLb

Director

Darpan completed a BCom (Hons) LLB from Auckland University in 1999.

Since then he has worked in investment banking, property finance, property investment and development, and general business.

Darpan is also an executive director of ASAP Finance Limited (a sister company to Veda Capital). Through ASAP Finance, he has been involved in over $500m of property loans in the last 10 years

He has also undertaken many commercial and residential property development projects throughout New Zealand.

Darpan’s general business experience includes past directorships at OCG Consulting Limited and RB Patel Group Limited.

profile

Parash Sarma BCom, PGDBA

Senior Lending Manager

Parash has over 13 years of experience across different industries including property finance, retail and market research.

Prior to arriving in New Zealand in 2008, he worked in Mumbai (India) and Fiji. He has been in the property finance industry since 2008 and is an active property investor.

Parash holds a Bachelor of Commerce degree and a Post Graduate Diploma in Business Administration.

Outside of work, Parash is an avid sports fan and spends most weekends either playing or watching sport.

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Kevin Zhou

Lending Manager

Kevin has been in the property finance industry since 2012. Prior to his current position, he worked in finance and retail.

Kevin has a post graduate degree in finance from Massey University.

He is fluent in English and Mandarin.

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Dan Liao

Lending Manager

Before joining Veda Capital, Dan worked in financial derivatives trading for more than three years.

He holds a bachelor’s degree in finance from Massey University.

Dan is fluent in English, Mandarin and Cantonese.

Property Finance

Property Finance

Veda Capital Limited provides short-term first mortgage finance to various types of clients including commercial and residential investors, developers, builders and self-employed business owners.

We lend against residential and commercial property, farm and bare land. We also offer development funding for land subdivisions, residential dwelling construction, multi-unit dwelling construction, apartments and commercial and industrial buildings.

Some of the unique features of the development funding that we offer are:

  • The funding is not contingent on pre-sales. So developers and builders can complete a project and maximise price and profit rather than being forced to get pre-sales at the beginning of a project at discounted prices.
  • Depending on the location and type of project, we may not require valuations and quantity surveyors for certifying progress drawdowns. This is a significant cost for the client and can mean a saving of $4,000-$5,000 per house - or tens of thousands of dollars in a large development.
  • We do not charge hidden fees such as early repayment fees, site visit fees, loan revision fees and monthly administration fees.

Being smaller than the banks we have the time to understand the client’s individual lending requirements and provide a customised solution. Loan approvals are subject to minimum conditions and we are usually able to respond within hours of receiving an application.

We can fund a huge range of requirements from $150,000 to $20 million. Whether you are looking for funding to complete a simple two-lot infill subdivision or a complex 200-lot greenfield development, Veda Capital Limited should be your first port of call.

General Lending Criteria

Minimum Loan
$150,000
Maximum Loan
$20 million
Maximum LVR
75%
Maximum Loan Term
12 months (roll over may be possible on maturity)

Underwrites

Veda Capital Limited provides underwriting services for developers and builders seeking mainstream funding for their projects. Typically, banks require a specific number of pre-sales before considering any type of development funding.

Sometimes getting the required number of pre-sales can be difficult and time consuming. Also, the developer may have to provide discounts to obtain the necessary pre-sales, thereby sacrificing potential profit. Pre-sales also set the benchmark for future sales and can have an adverse effect on prices once the development is complete.

An underwrite is often a great option that works for the bank as well as the developer, as it dispenses with or reduces the need for pre-sales. Under this arrangement, the underwriter (Veda Capital) agrees to purchase a specific number of properties in the development at a mutually agreed purchase price, called the Underwrite Price (usually 70% to 80% of open market value). In the event that the developer is not able to sell the completed product before a specific date (Termination Date), the bank will require Veda Capital, as the underwriter, to settle the underwritten properties.

The underwriter will charge a fee for this service to the developer and will also deposit a percentage of the underwrite price with the bank, as a performance bond in the event the underwrite is called up.

This arrangement works for the developer and the bank because:

  • From the bank’s viewpoint, it has the assurance of knowing a specified number of properties will be sold on completion of the project should the developer not be able to sell the completed product, thereby reducing the residual debt on completion of the development.
  • The developer does not have to sell properties at a discount to attract pre-sales. This means it is able to complete the development and sell the completed product at full market value, thereby maximising profits. This is especially beneficial in a rising market, as market value on completion will be higher then pre-sale prices.
  • One of the most critical components of any underwrite is the bank’s acceptance of the underwriter. We have successfully underwritten projects for most of the major trading banks in New Zealand.
Underwrites

General Underwrite Criteria

Minimum Amount
$100,000
Maximum Amount
$20 million
Underwrite Price
70% - 80% of market value
Underwrite Fees
4% - 5% plus brokerage
Property Type
Sections, houses, apartments, town houses

Private Equity & Joint Ventures

Underwrites

Veda Capital Limited also participates in select joint venture arrangements for development projects. These range from land subdivision, construction of residential dwellings or apartments, to development of commercial properties.

While each joint venture proposal is assessed on its individual merits, some of the key parameters for deciding on joint venture participation are:

  • Strength and background of the joint venture partner

    Joint venture partners must have the skill and demonstrated capability for delivering a project from inception to completion.

  • Ethics

    We only partner with people who have an unblemished history and have strong business ethics. In the unlikely event a project runs into financial difficulty, we strongly believe in paying all our debt obligations rather then hiding behind a limited liability company.

  • Location

    The project must be located in one of the major cities in New Zealand.

  • Type of Project

    The project must involve residential or commercial property development. We do not enter into areas outside our core expertise or where our perception of the underlying risk is high - such as farms, irrigation projects, hotels etc.

  • Return / Risk Appetite

    The project must be within our risk appetite parameters and the return must be commensurate with the underlying risk. We will undertake a detailed risk assessment before entering into a joint venture arrangement.

Brokers

Mortgage brokers are critical to the success of our business and we endeavour to establish and maintain long-term business relationships with the mortgage broking community.

As a mortgage broker, you stand to gain significant benefits by referring your client’s business to us. Some of the key benefits are:

  • We will assist you in structuring the deal - and we thrive in finding solutions for complex funding applications.
  • No claw backs. The client may repay us early but you keep your full commission.
  • Our commission is more lucrative than mainstream lending (1% commission versus 0.6% - 0.7% from mainstream lenders). However, if in our opinion the application is fundable by a bank we will refer you to our property finance unit contacts at a mainstream bank.
  • Our average loan size tends to be higher, typically above $1 million. Larger loans mean larger commissions for you.
  • You can establish a foothold and continue to grow in a niche segment where there are significant opportunities and limited competition.
Underwrites

F.A.Q

Q. Can I repay my loan early?

A. Yes, you can choose to prepay either the full loan or part of the loan early. We charge no early repayment fee - subject to 30 days’ notice.

Q. How much can I borrow?

A. Minimum loan amount is $150,000 but we can lend up to $20 million on a single loan.

The amount you can borrow will depend on the level of security you can offer and the amount of earnings you have. We can lend up to 75% of the value of the asset, depending on the type and location of the security being offered.

Q. What fees do I have to pay?

A. There is an application fee of 2% plus brokerage (if applicable). This amount is generally added on to the loan so you do not have to pay anything upfront. There are no other hidden fees such as a minimum lending fee or an early repayment fee.

Q. What interest rates can I borrow at?

A. Given the short-term nature of the borrowing, we generally offer only fixed interest rate options, which means your interest rate will not change during the term of the loan. Among other things, the interest rate will depend on the level of risk and the term of the loan.

Our current base rate for borrowing is 8.95% p.a. This rate will be applied to loans we consider to be low-risk. A margin may be applied to this base rate to reflect the level of risk the loan represents.

Q. How long can I borrow for?

A. You can borrow from 3 months up to 12 months. In some circumstances we will also lend for longer than 12 months. If the loan has been conducted satisfactorily, we will generally offer to roll over the loan on maturity, if requested by the client.

Q. What types of loans are available?

A. We offer loans for most purposes, as long as they are secured by property. We offer you complete flexibility in structuring your loan. You can choose between:

  • Interest only - pay interest only on a regular basis, based on the payment cycle you choose.
  • Part interest only - pay only part of the interest on a regular basis based on the payment cycle you choose. The balance of the interest can be paid at the end of the term of the loan.
  • Principal and interest - regular payments of both interest and principal based on the payment cycle you choose.
  • One lump sum payment - Pay all interest and principal at the end of the loan.

Interest payment cycles can be monthly, quarterly, 6 monthly or simply one lump sum payment at the expiry of the loan.

Q. What is the Anti-Money Laundering and Countering Financing of Terrorism Act (AML/CFT)?

A. From 1 July 2013, the Anti-Money Laundering and Countering Financing of Terrorism Act came into effect in New Zealand. This Act places an obligation on all New Zealand banks and financial institutions to detect and deter money laundering and terrorism financing. This will help in protecting New Zealand from financial crime and improving New Zealand’s international reputation as a safe place for doing business.

Q. How will the AML/CFT affect you?

A. All banks and financial institutions will need to collect more information to verify a customer’s identity and source of funds. Even if you have borrowed from us before, we may need to ask you for extra identity documents and information.

Businesses, trusts or other organisations will need to provide information on the organisation and anyone who acts on its behalf.

This will typically have to be done before we can undertake a transaction.

This is something affecting all banks and financial organisations in New Zealand and we are no different. We hope you understand but if you have any questions please feel free to contact us by email or phone +64 9 520 3660.