FM Industry quotes Ben Butterworth on the use of private capital investment to fund football stadium renovations

Ben Butterworth, Associate, comments on the recent announcement that Real Madrid is seeking €360 million to rebuild the Santiago Bernabeu Stadium.  

"This is not the first time that we have seen football club look to private capital investment to fund a stadium renovation; Arsenal and Tottenham Hotspur both relied partially on private capital when building their respective new stadia. Both of those projects took a number of years to complete, meaning long-term finance was key. 

"A football club’s stadium is its primary real estate and a critical asset for generating revenue. Modern football stadia are more than just a place to play and watch football; there is an expectation that they can provide state-of-the-art leisure, conference and commercial facilities to supplement the club’s revenue generated by ticket sales – as well as becoming a hub for the local community. The potential revenue generated by a top tier real estate asset, particularly for a major football club like Real Madrid, explains why institutional investors would be interested in helping to finance a stadium renovation project like this. 

"That said, financing a redevelopment comes with multiple risks and great care needs to be taken with the property, construction and financing and security documentation to balance the investors’ risk exposure with achieving the ambitions of the project."

Read the piece in FM Industry here.