For a deal I am working on for a unit development in Wynnum, the valuer made a comment about the project potentially coming up against 308 other units in competing projects about to commence in that suburb.
As part of my training, Richard took me out to Wynnum where we looked at all 14 projects which were supposedly about to commence, along with all currently available stock. We then drove around the rest of the suburb looking for anything else.
Following this inspection I spent time talking with the borrowers, who are marketers themselves, to get a better understanding of their marketing plan. I also spoke with local agents to better understand their views of the Wynnum market. I learnt that the Wynnum unit market can be broken up into three segments namely, central, west of Tingal Road and north of the creek.
Ben O’Hara, who heads the credit committee at GPS, recently spoke with the GPS team about credit requirements. He went through the six C’s: character, capacity, capital, conditions, collateral and common sense.
This research confirmed that the deal I am working on is well placed in the market, has little direct competition and passes the “six C’s”.
These experiences have taught me how hands on GPS is in loan selection. It is all about getting as much information as possible, getting out there and having a look, speaking with people and then making a fully informed decision.
James Hoare
Assistant Portfolio Manager
