Development Finance Partners (DFP) was engaged by its developer client to procure funding for a 70-lot residential land subdivision in South Western Sydney, NSW.

The key issues in sourcing funds

The major issues were:

  1. Settlement of the land was required prior to completion of the tender process and engagement of the head civil contractor. 
  2. The client was seeking a 90% loan to total project cost.
  3. Proposed pre sales were on builders’ terms, subject to 5% deposits only.
  4. The funding terms were being negotiated against the uncertainty of the Covid 19 pandemic; and
  5. Valuation firms and market commentators were in general marking down property values in line with ongoing difficult economic conditions.

DFP's role:

DFP entered into an advisory arrangement with the client to map out the key terms, milestones and risk mitigation strategy, as a basis of negotiations with its Capital Partner, a multinational finance and property organisation.

Based on those outcomes DFP prepared a detailed credit submission to the Capital Partner, outlining the development proposal, project feasibility, client background and proposed funding structure, as a prelude to initiating an ongoing consultation process between the client, their consultants and the Capital Partner. 

A successful finance approval ensued, modelled on a combination of Senior Debt and Mezzanine Finance, geared to 90% of project cost and linked to agreed sales targets.

Financial close has recently taken place and subdivision works are underway. 

Finance Terms

Type: Combination of Senior Debt / Mezzanine Finance

Loan amount: $22,800,000

LVR: 90% of total development cost

Term: 18 Months

Whatever the size of your development plan, DFP have a wealth of experience and strong relationships to help you succeed. Contact us to explore your tailored finance options.



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