Background
Development Finance Partners (DFP) was engaged by a repeat client to secure funding for a 17-lot subdivision in Bray Park, NSW. The project aimed to develop vacant land into a desirable residential area. Given the unique market conditions and the client's strategy to maximise sales value closer to completion, the client sought a funding solution that did not require presales.
The Project
This project aimed to develop a 17-lot subdivision, enhancing the property’s value and marketability. The funding secured would cover the construction and development costs, ensuring the project stayed on track for timely completion.
The Challenge
The primary challenge was securing a development loan that met the client's requirements of zero presales. This approach is uncommon in property development due to the increased financial risk. Additionally, the client needed to achieve a favourable LVR to make the project financially viable.
DFP's Strategic Solution
To address these challenges, DFP leveraged its extensive network and strong relationships with capital partners. Here's how DFP managed to deliver a successful solution:
- Negotiation with Capital Partners: DFP negotiated terms with a preferred capital partner to secure a 12-month funding facility.
- Zero Presales: The facility was structured to avoid pre-sales, allowing the client to maximize sales values closer to the project's completion.
- Favourable LVR: DFP secured an LVR of 47% of GRV and 60% of TDC, providing the client with the financial leverage needed for the project.
Results and Benefits
Conclusion and Developer Insights
This case study demonstrates how lender alignment and strategic structuring can significantly influence funding outcomes for subdivision projects, particularly in more constrained lending environments.
Despite the project proceeding with zero presales, DFP was able to position the transaction around the strength of the site, the developer’s experience, and the project’s overall feasibility. By understanding lender appetite and presenting the opportunity strategically, the facility was structured to support project momentum while preserving flexibility for the developer.
For developers undertaking subdivision projects, funding success is rarely determined by location or project quality alone. The way a transaction is structured, packaged, and aligned with the right capital partner can materially impact leverage, timing, and overall project viability.
As lending conditions continue to evolve, developers who engage experienced development finance advisors early in the process are often better positioned to navigate lender requirements, improve funding outcomes, and maintain control throughout the project lifecycle.
Understanding how lenders assess feasibility, risk, and supporting documentation such as quantity surveyor reports for construction loans can also play an important role in achieving stronger funding outcomes.
What This Means for Developers
- Strong subdivision projects can still secure funding without presales when structured correctly
- Lender appetite varies significantly across development asset classes and project stages
- The way a project is positioned can materially impact leverage, pricing, and approval outcomes
- Early engagement with development finance specialists can improve feasibility and preserve equity
- Strategic lender alignment is critical for maintaining project momentum and reducing funding delays
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.
