The developer said it would use the cash raised from the underwitten rights issue to buy projects that are ripe for development at “distressed prices”.
It said the liquidity crisis was forcing developers to plough more equity into schemes. This has opened fresh opportunities for Development Securities to strike good deals with site sellers early in the development cycle.
David Jenkins, Development Securities’ chairman, warned that he could not see any prospect of an early end to the bank lending crisis in the commercial property sector.
But he added that the relative shortage of new bank finance meant that a number of property owners lacked liquidity to finance project plans and working capital.
This has created opportunities to acquire assets at attractive and, in some cases, distressed prices, he added.
Jenkins said: “We continue to be well placed to take advantage of the dislocation in the UK property market caused by the difficulties that the market is experiencing in obtaining access to capital, both equity and debt.
“The recent precipitous fall in loan origination from those banks that have traditionally worked within our industry is unlikely to be reversed soon since the overall exposure of the banking sector to commercial property remains and is likely to remain for some time at record levels.”
The developer successfully raised £94m from a rights issue last year.