Development Finance Partners (DFP) was engaged to provide a funding solution for a pre-DA landbank acquisition for a future 18 Strata titled industrial unit development site.
The site was an original off-market property purchase, circa 12-18 months prior under option contract. During the option period, the site appreciated significantly in value and the developer sought a 70% LVR against the appreciated valuation amount without lowering the purchase price.
DFP were retained to advise the client on funding strategies to procure a landbank facility to minimise the cash equity requirement. In submitting, and then promoting, the transaction to its Capital Partners, DFP undertook a detailed assessment of the real estate fundamentals, the planning issues and the overall credit worthiness of the proposal including its sponsors.
Thereafter, DFP coordinated and lead several lender discussions and negotiations with its Capital Partners culminating in a credit approval and successful settlement of the transaction during July - August 2023.
The funding was structured with time buffers to accommodate the development and construction approval phase and included an interest and fees capitalisation facility linked to that timetable.
About the developer:
Our client is an experienced developer with 30 years’ experience in the Melbourne ResDev, office and industrial sectors.
As a result of DFP’s success for the customer, it has been subsequently engaged to procure finance for three other group developments, totalling circa $50m of debt funding.
Type: Landbank Finance
Loan amount: $7,700,000
Term: 6 months with a 3-month minimum term allowing for approvals and to roll immediately into a construction facility.