Case Study | DFP Secures $3.9M and Zero Presales for Luxury Duplex Development. Putney, NSW

Background 

Development Finance Partners (DFP) was engaged by a repeat client to fund a high-end construction project in Putney, NSW. The project entailed developing two strata-titled, two-level luxury duplexes. The client sought a financial solution that would allow them to proceed without any presales commitments, maximising the sales value closer to the project’s completion.

The Project

The project involved constructing and developing two luxury duplexes at in Putney, NSW. DFP provided a construction and development facility amounting to $3,900,000, with a loan-to-value ratio (LVR) of 60% of Gross Realisation Value (GRV) and 70% of Total Development Costs (TDC). The facility term was 12 months.

Challenge

The primary challenge was to secure funding for the project without requiring presales, which are typically a standard requirement to mitigate lender risk. The client wanted to capitalise on the high market value of the completed units by selling them closer to the completion date, rather than committing to presales at potentially lower prices.

DFP's Strategic Solution

DFP leveraged its relationships with capital partners to negotiate favourable terms for the client. The strategic solution included:

1. Securing Funding: DFP arranged a construction and development facility with a preferred capital partner, meeting the client's financial needs.
2. Zero Presales Requirement: DFP successfully negotiated terms that eliminated the need for presales, allowing the client to maximise the sale prices of the luxury duplexes.
3. Optimised LVR: Achieved an LVR of 70% of Total Development Costs and 60% of the Gross Realisation Value, ensuring sufficient funding while maintaining favourable loan conditions.

Results and Benefits

Conclusion

DFP's innovative financial strategies and robust capital partnerships enabled the client to undertake a high-quality development project without the constraints of presales. This case study demonstrates DFP's capability to deliver customised financial solutions that align with the unique needs and goals of their clients, ultimately driving successful and lucrative project outcomes.