Case Study | Quick site finance for a large residential land subdivision, Outer-North Melbourne VIC • DF Partners

DFP secured site finance for settlement of a large 1.384 ha residential land subdivision in Outer-North Melbourne, VIC

Project Background

DFP was engaged by the developer to obtain finance and settle within 10 days, the purchase of a 1.384 hectare residential land subdivision site located in an outer-northern suburb of Melbourne. This followed a prior lender not completing the purchase, leaving the developer at risk of not completing their contractual purchase obligations.

To complete the land settlement, the client sought a quick lending solution.

Location of the Site

Located in an outer-north suburb of Melbourne, 20km north of the Melbourne CBD, the site is positioned in a high demand location that has experienced a 50% rise in median house price since 2015. The location is well serviced with a broad variety of amenity, numerous parkland reserves and variety of education institutions throughout the area. 

The Developer

The developer has extensive development experience and has successfully delivered land subdivisions and residential and commercial projects in Victoria.

Key Challenges

• The property had an existing DA for a 36-lot subdivision and a valuation of $6.42 million. 
• With the continued increase of housing shortages and recent increases to site density approvals since original DA approval, the client saw an opportunity to revise the DA and reconfigure the lots, with a view to obtaining a significant uplift in the 'as-is' and gross realisation value (GRV) including and profit.
• The client expected the revised DA process and negotiations to be shorter and to use the site value uplift as equity for the land settlement based on the reconfigured lots.
• When DFP was engaged, the prior lender, despite issuing approvals, pulled out of funding leaving the developer in breach of contract and seeking a settlement extension.

The Results

Quick site finance secured within a week for land settlement.

Development Finance Partners was engaged to provide a quick and reliable funding solution.

DFP assisted the client in assignment of the existing valuation and was able to successfully negotiate terms with a preferred lender and deliver finance within a week for land settlement. Arranging finance of $5.6 million at a LVR of circa 76% on current 'as-is' site value with the existing 36-lot development approval. 

• Loan amount: $5.6 million
• LVR: 76% on 'as-is- site value

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