Forward funding as a tool for shortening project timelines by 6–12 months 

In European development practice, an increasing number of projects involve investors entering before the completion of design — at the stage of land ownership and permitting procedures. One of the key instruments in such a structure is forward funding. It describes a model in which the investor participates in the project before construction begins, while performance of obligations takes place step by step as work progresses. 

Financing begins before construction works start 

The difference between forward funding and classical transactions is that the parties sign the SPA (sale and purchase agreement) before construction is completed. This makes it possible to agree the deal structure in advance and fix key parameters: price, risk allocation, financing milestones, and documentation requirements. 

This approach removes the need to wait for construction completion, reducing the time lag between obtaining permits and starting works. 

Transfer of the land to the investor after final permits 

Forward funding usually entails that the ownership of the land — or of the SPV holding the land — transfers to the investor immediately after obtaining key permits. This removes one of the main sources of delay: the need to confirm the stability of title after construction has already begun. 

Transferring the asset early reduces the number of legal approvals that would normally require separate verification in a classical post-construction sale. 

Payments are made according to construction milestones 

The financial structure of forward funding is divided into several stages. The investor pays for: 

• the land or the SPV holding the land, 

• the works completed by the time of the transaction, 

• subsequent construction stages as they are completed. 

The developer does not need to fully finance early phases with its own capital, eliminating cash-flow gaps and increasing timeline predictability. 

Acceleration of approvals and project preparation 

The deal structure is fixed in advance, enabling the developer and investor to conduct legal, technical, and project preparation in parallel. In a traditional model, much of the documentation work happens sequentially — first permits, then deal structure, then bank financing. 

Forward funding allows these processes to run concurrently, as the investor accepts early-stage risk and participates in the coordination of project documentation. 

Final effect: 6–12 months saved 

The combination of early deal fixation, transfer of land after permitting, and milestone-based payments allows construction to start significantly earlier. Legal sources describe such structures as a way to avoid delays caused by sequential financing and late confirmations from third parties. 

In practice, this results in shortening the project timeline by 6–12 months by eliminating steps that were previously completed in sequence. 

Commentary from M24 Investment Division: 

The practice of forward funding continues to establish itself as an effective tool for accelerating development in European jurisdictions. A structure in which the investor joins before construction and assumes part of the obligations in stages removes several traditional bottlenecks: from cash-flow gaps to legal delays at asset-transfer stage. Formal investor involvement after final permits but before construction allows synchronisation of project, legal, and financial preparation, directly affecting the timing of project launch.