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Optimisation of property developer financing - a progress report

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Developer financing has always been highly risky and must therefore be intensively reviewed. This, and the fact that they are processed in accordance with the Brokers' and Developers' Ordinance, gives rise to numerous special features in processing. Credit processing is usually very complex and costly. The personnel deployment at the banks for a professional handling of the loans was and is enormous. In cooperation with Sparkasse Freiburg-Nördlicher Breisgau, highQ Computerlösungen GmbH has therefore been continuously developing abakusBT, the solution to map the property developer financing process more efficiently and accurately, since 1999. Nicole Farrelly, head of the property development group at Sparkasse Freiburg-Nördlicher Breisgau is the "co-inventor" of the software. In this article she presents the essential features for banks.

In recent years, it has become necessary to obtain very detailed knowledge of market developments, but also of cost and contract award risks, due to the ever longer building permit periods and the often significantly increased construction costs and rising project sizes. It is therefore becoming increasingly important for lenders to have a functioning "early warning system" in order to identify possible imbalances or problems in the loans concerned in good time. "With abakusBT we have a software that not only saves double entries in different systems, but also checks the entries for plausibility. With the highQ solution, the users are guided through the masks in a sensible way, so nothing is forgotten or overlooked. Through this systematic approach, the software casually conveys to the user the bundled knowledge of all experts who work with abakusBT and continuously contribute their knowledge. summarizes Nicole Farrelly the motivation for the development and use of the highQ software.

The property development loan business is a highly interesting line of business, but the lack of land in urban areas results in high land purchase prices, sometimes combined with building law risks or conditions on urban development contracts that make sales more difficult. The combination of very high purchase prices combined with long development times harbours a highly potentised risk, as market prices today must be forecast for many years to come. The credit requirements of property developers are high and the scarce resource of equity capital is therefore tied up for years and the limits of the banks usually also limit the volumes. Nevertheless, property development financing is and remains a highly interesting business area for banks, which often results in further business, such as the final financing of buyers or property sales. In order to be able to realise the potential profits from the financing here, the processing must be lean and tightly organised. Risk controlling and risk management must be constantly updated.

abakusBT combines these necessities and promotes the highest possible efficiency in processing. By means of plausibility checks, the software offers high security standards at an early stage of processing through detailed cost and contribution margin controls. The individual data are entered once into the clearly arranged input masks. Plausibility

checks during input and storage largely prevent incorrect entries, and the DSGVO is of course complied with. With abakusBT you manage your property developer loans optimally. The simplified and uniform processing of property developer loans with abakusBT is a particular advantage over the classic methods. The constant manual transfer of object and buyer data for the various evaluations is no longer necessary. In addition to the basic property-related and developer-specific data, all account transactions and purchase contracts are recorded. With the help of intelligent input completion, even large amounts of data can be recorded quickly and easily. Thanks to the time-saving import interfaces (AMADEUS, DTAUS), you can also import data supplied by the property developer (e.g. calculation, unit list, transfers) directly into the software.

All important entries and changes are logged and thus documented to ensure the dual control principle. abakusBT is easy to use for every user due to its clear structure. The recorded data is evaluated by the program and compared with the planned figures. This enables a detailed control of the use of funds and costs, current profit calculation and an automatic update of the contribution margin. The interfaces to the original EDP systems additionally simplify the work in the daily business.

As a result of the ever increasing financing volumes and project sizes, bank partnerships are increasingly being formed. Uniform processing facilitates these joint financing arrangements immensely. abakusBT is the solution for property developer financing in all banks, at the level of the administrator, consultant and controller. According to the guideline "more overview, less risk" the highQ application optimizes the credit business - and creates security in daily business through precise, audit-proof workflows. With just a few mouse clicks, all relevant data such as average sales proceeds per sqm, current sales status, current remaining credit, remaining loan/sqm and much more is available to you. Standard forms and letters, including the declaration of exemption, already contain all the necessary data and can be printed out (automatically completed) if required. Under constant monitoring of plan and actual data, the bookings, divided into cost groups, are included in the evaluation. Indications of cost overruns are immediately displayed with cost element and amount. The system enables the complete recording, continuous updating and regular checking of all financing-relevant data of a construction project, a task that can hardly be performed "by hand" sufficiently. Volker Kluitmann, head of the real estate customer department at Stadtsparkasse Düsseldorf, would therefore not want to do without the helpful software any longer: "abakusBT is an essential component for the risk-appropriate support and control of the property development business in our company".

However, the system not only supports the specialists in their daily work, but also leads to the "forced professionalisation" of less experienced clerks, as Nicole Farrelly, head of the property development group at Sparkasse Freiburg-Nördlicher Breisgau, puts it. "The system helps institutions with little property development business to ensure uniform processing in accordance with the procedure that has proven itself in practice. Not everyone has to reinvent the wheel. In this way, professional handling of the property development business is also possible in smaller houses that do not have their own property development department," continues Farrelly. New employees in this area have also reported that the clear structure of abakusBT makes it much easier to familiarize themselves with the new job.
The software developed by highQ in close cooperation with the users ensures that the performance of the application is always adapted to the current requirements of the property development loan business. Currently, the requirements of the DSGVO have been implemented in the software. In this way, a best-practice solution has been created based on the know-how of many experienced specialists. The further development of abakusBT is especially supported by annual, nationwide user meetings, the last meeting was held at the Sparkasse Rosenheim-Bad Aibling. Enhancements or changes that affect all users are discussed and coordinated together at these events and often already considered in one of the next software releases of abakusBT. However, the value of the user meetings goes far beyond the further development of the software: "At the user meetings I especially appreciate the direct contact to other abakusBT users, in order to exchange information about current questions and developments in the property development loan business", emphasizes Bernhard Hedrich, head of the property development center of the Kreissparkasse Ludwigsburg. In fact, the personal contacts have meanwhile developed into a network of experts, in which lively communication takes place between the annual meetings and many a risk is mitigated.


Nicole Farrelly, head of the developer group of the Sparkasse Freiburg-Nördlicher Breisgau
Kai Horn, Head of Sales & Marketing, highQ Computerlösungen GmbH, Freiburg


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