Background
Development Finance Partners (DFP) was engaged to secure a large-scale construction finance facility for a residential development in Sydney’s North-Western suburbs. The project, comprising 88 apartments, had a long and complex history, beginning in 2017 when the client acquired the site—then a 10-unit older-style block—with a vision for redevelopment.
In late 2018, the client entered an on-sale option agreement with a prominent marketing and development group. Although development consent was granted, the purchaser was ultimately unable to complete due to COVID-related disruptions. The client pivoted and made the strategic decision to proceed independently, undertaking early construction works (including basement level), building a display unit, and refining the design with Council over the following years.
By 2023, the client was ready to complete the project and needed a funding partner capable of delivering a $41 million facility with flexibility around presale requirements and construction staging.
Project Overview
The development involved the transformation of a strategically located site into a multi-storey residential apartment building, catering to strong demand in Sydney’s growing outer metro region. The build was already partially completed when DFP was engaged, with significant civil and below-ground work finalised.
Key Metrics
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Loan Amount: $41,000,000
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Loan Type: Residential Construction Finance
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LVR: 70% of Gross Realisation Value (GRV)
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Presale Coverage: Limited to 30% debt cover
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Location: Sydney Metropolitan – North-Western Suburbs
The Challenge
The transaction presented several significant challenges:
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Partially completed works, requiring careful due diligence by funders
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A high borrowing requirement of $41 million, limiting eligible lenders
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Pre-sales were approaching sunset dates, creating urgency
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Market uncertainty surrounding rising construction costs and interest rates
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Presale coverage was lower than most traditional lenders required
These complexities made traditional funding routes unviable and required a bespoke solution from an experienced financier familiar with complex construction risk.
DFP’s Strategic Solution
DFP led all aspects of the funding process, leveraging long-standing relationships to secure approval with a trusted capital partner who was comfortable with:
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70% LVR, even with limited presale cover (30% debt cover)
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Funding a partially completed site with appropriate step-in rights and performance guarantees
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Offering attractive terms despite broader market volatility
DFP also:
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Negotiated extensions to presale contracts via the client’s solicitor
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Introduced a specialist marketing firm to boost sales velocity for remaining units
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Liaised with the Project Manager and builder to finalise step-in documentation and builder performance guarantees
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Assisted in preparing and submitting all required loan and settlement documentation
Results and Benefits
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$41 million construction facility secured, enabling project completion
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70% LVR approved, with flexible presale terms
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Presale contract extensions negotiated, avoiding risk of lapse
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Project momentum restored, with new marketing campaign underway
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Builder, financier, and legal stakeholders aligned, ensuring smooth drawdown and construction continuation
Conclusion
This case highlights DFP’s end-to-end involvement in delivering strategic funding for complex, high-value residential projects. By securing a $41M facility with low presale requirements and full stakeholder coordination, DFP enabled the developer to regain control, complete the project, and position it for successful sales outcomes in a challenging market.
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.
