Background
Development Finance Partners (DFP) was engaged by a long-term client to secure landbank finance for the acquisition of a strategic subdivision site in Austral, New South Wales. The client, who has worked with DFP for over seven years, negotiated the land purchase in late 2022, with contracts exchanged in April 2023.
An initial Development Application (DA) for a 25-lot subdivision was lodged in November 2020 but was ultimately unsuccessful. Remaining committed to the project, the developer revised the proposal and submitted a modified DA for 22 lots, which was approved in August 2023, unlocking immediate value uplift.
Project Overview
The site was acquired for $6.7 million, but with the approved DA in place, the valuation increased to $7.8 million. The client’s objective was to leverage the uplift in value to reduce the upfront cash equity required for settlement and free up capital for future site acquisitions.
DFP was tasked with securing finance that recognised the DA-approved value, rather than the contract price, allowing the client to retain liquidity and pursue additional opportunities.
Key Metrics
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Loan Amount: $5,460,000
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Loan Type: Landbank Finance
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LVR: 70% of valuation / 81% of purchase price
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Valuation (with DA): $7.8 million
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Purchase Price: $6.7 million
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Term: 12 months
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Location: Austral, NSW
The Challenge
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The original DA was rejected, requiring a revised strategy and planning submission
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The client needed funding that would reflect the uplifted DA-approved valuation, not just the purchase price
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The goal was to minimise equity contribution while settling the land acquisition on time
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The finance solution needed to be arranged quickly, following DA approval
DFP’s Strategic Solution
DFP drew on its deep funding network and experience with valuation-led structuring to secure a solution that delivered maximum leverage based on the uplifted site value.
The facility was structured as follows:
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70% LVR based on the approved valuation of $7.8M
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Equivalent to 81% of the original purchase price
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12-month term, providing time for further project planning or site rollout
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Reduced equity contribution, enabling the client to redirect capital into other acquisition opportunities
By aligning the facility with the DA-approved value, DFP helped the client unlock additional capacity in their portfolio strategy.
Results and Benefits
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$5.46 million landbank facility secured
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Purchase settled on time with minimal equity contribution
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Finance based on uplifted valuation, not just contract price
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Client retained surplus capital to pursue other site acquisitions
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Enabled continued momentum in a competitive land acquisition environment
Conclusion
DFP’s strategic funding solution enabled the client to settle a key land acquisition while maximising the benefits of DA-related value uplift. By securing a facility at 81% of the purchase price, based on the approved valuation, DFP empowered the client to retain liquidity and expand their acquisition pipeline with confidence.
Client Testimonial
“I cannot thank you enough for constantly supporting our Group over the many years, with leading edge funding strategies and packages”
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.
