Across European development practice, a growing share of projects now see the investor enter before the design phase is complete — at the land and permitting stage. Forward funding is the instrument that makes this possible. In our mandates, it is the single most effective tool for compressing the timeline between permit and construction start.

The signature event: SPA before completion

The defining structural feature of forward funding is that the sale and purchase agreement is executed before construction is finished. Price, risk allocation, financing milestones, and documentation standards are fixed at the front end rather than negotiated at delivery. The value of that front-loaded certainty compounds through every subsequent stage of the project.

In a classical model, those terms are agreed at or after construction completion — meaning the developer shoulders early-phase risk alone, with no guarantee of the exit pricing that will justify the deployment.

Land transfer at permit, not at handover

A forward-funded structure typically transfers land ownership — or the SPV that holds the land — to the investor immediately after the key permits are secured. This removes a significant category of legal delay that would otherwise sit at the end of the project: title verification, re-registration, and the confirmation cycles that institutional buyers require before taking a post-completion asset onto their balance sheet.

Transferring the land early collapses those approvals into a single moment, early in the project lifecycle, when the parties already have their legal counsel engaged on the SPA itself.

Milestone-based payments

The financing flow is structured in discrete tranches. The investor funds:

  • the land or the SPV holding it,
  • the works already completed at the transaction date,
  • each subsequent construction stage as it reaches agreed milestones.

This keeps the developer’s own capital free from the cash-flow gap that classical financing produces between permit and bank drawdown. For the investor, it means capital deployment tracks actual project progress rather than a single upfront commitment.

Parallel workstreams

Because the deal is agreed early, the developer and investor can run legal, technical, and financing workstreams concurrently. In a traditional sequence, these phases happen one after another — permits first, then financing negotiation, then construction contracting. Forward funding compresses them into a parallel structure because the investor has already priced the early-stage risk.

This is where the clock savings become real. The investor contributes actively to documentation alignment, and senior lenders approach the financing decision with a known equity partner already committed.

The six-to-twelve-month effect

Taken together, the three mechanics — early SPA, land transfer at permit, milestone-based funding — reliably compress the pre-construction phase by six to twelve months. Legal commentary on the instrument frames it in similar terms: a way to avoid the delays produced by sequential financing and late third-party confirmations.

In a market where Basel IV has compressed senior LTVs and CBRE is tracking a sustained European equity gap through 2027, six to twelve months is not a marginal improvement. It is the difference between a project that delivers into a tight market and one that misses the cycle.

M24 perspective. Forward funding is not a financing preference. It is a timeline instrument. Our mandates are structured to enter at the permitting stage precisely because that is where a disciplined equity partner creates the most time and cost compression for the sponsor. For developers working on ready-to-build European residential and mixed-use, the right early-stage partner is a project-acceleration tool, not just a capital source.