Cresco’s experience of optimising the funding structure with specific focus on the operating company and the property company (generally with different shareholders) is critical to achieving financial close.
The typical commercial property finance approach does not work on greenfield hospital financings, and care needs to be taken when assessing optimistic occupancy projections that result in high returns. Moreover, Cresco, as the project finance advisor, regards saving equity from restructuring as important for long-term progress. Andy Tant, an executive director at Cresco, notes that “limiting post-construction equity support based on rental and debt sculpting creates complexity in the financial analysis but an opportunity to improve equity returns”.
Speaking to Cresco’s industry experience, Andy adds “although the market risk is higher than a typical energy project, this is countered by significantly better returns with high teens for single assets and early twenties of portfolios of over 1000-bed hospitals. These are combined and efficiency of costs and negotiation of medical aids is achieved.”
As a specialist financial advisory firm, we are proud to consult on these large-scale healthcare projects. Through this involvement on the continent, we are able to secure success and Enable Growth in Africa. Contact us today for a holistic, hands-on approach to financial advisory and project management: https://www.crescogroup.africa/contact-us/.