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Gold Coast Bulletin - 21 September 2004

Former rivals team up in BRB Capital Venture

Two men who have organised funding for Gold Coast property projects worth billions of dollars have teamed up with a developer to tap into the mezzanine finance and syndication markets.

The two are Guy Hasenkam, who in the late 80`s started Advance Bank commercial-lending offices on the Gold Coast and in Brisbane, and Chris Kite, who for 10 years was regional manager for development finance for Suncorp Metway.

They have linked with developer Bruce Barclay, a Gold Coast developer who has undertaken projects from Byron Bay to Bundaberg, to form BRB Capital.

The company is well on the way to completing its first deal - providing mezzanine funding for a four level office building within the Varsity Central business precinct at Varsity Lakes, Robina.

Mr Hasenkam, the BRB Capital managing director, says the company is also on the verge of securing its first property for syndication - a retail centre north of the Gold Coast.

He says BRB Capital`s mezzanine funding operations are intended to provide an option for investors willing to take a higher level of risk in return for a higher return.

In the case of the Varsity Central funding exercise, a 14 per cent annual return is forecast.

The building involved, Silver @ The Exchange, is the first of two hi-tech properties being built by Mr Barclay's BRB group on a Varsity Parade holding.

The $23 million Silver will sit on 4160sqm site and have 5145sqm of strata-title office space.

It is being undertaken in the wake of the BRB Group completing the 92-unit Central Park apartments and 27-unit mixed use SOHO projects at Varsity Central.

Mr Hasenkam says his business association with Mr Kite is ironic.

"During our Advance and Suncorp Metway days we were healthy competitors," said Mr Kite.

"We used to compete to win funding deals. Now we are sitting on the same side of the table."

Projects with which Mr Hasenkam was involved during his 1987-1997 period with Advance included the Raptis Plaza, Forum and Paradise Avenue retail-commercial properties in Surfers Paradise and infrastructure around the Robina Town Centre.

In 2000 Mr hasenkam was one of the founders of the Opus group, which has arranged a dozen commercial property syndications.

Mr Kite's Suncorp Metway role which started on the Gold Coast in the early 90`s, led him to arrange funding for projects such as The Moroccan, Mediterranean and Phoenician towers and the Diamond Beach and Diamond Sands resorts at Broadbeach.

Mr Hasenkam says BRB Capital, which has been licensed by the Australian Securities and Investments Commission, is intended to tap into a developer demand for mezzanine, or second mortgage, funding from a regulated lender.

"The success of Gold Coast company City Pacific shows that there is a market for groups which will only lend to people who have proven themselves as developers and not to Johnny Come Latelys," said Mr Hasenkam.

He says BRB Capital will also target investors looking for solid long-term exposure to properties with good tax advantages.

"We'll be targeting properties in the $5 million to $15 million range that can be syndicated - we don't want all our money tied up in a $50 million investment," he said.