Background
The client is an experienced residential property developer with a strong history of delivering subdivision projects. Their approach focuses on securing sites early, managing planning risk, and structuring funding that preserves equity while supporting delivery.
Project Overview
The project involved a 52-lot residential subdivision in Southeast Queensland. The site was acquired prior to final development approvals, which required land bank funding to secure the opportunity during the planning phase.
The funding strategy needed to support an extended approvals period and provide a clear transition into civil construction finance once approvals were granted.
Key Metrics
• Senior construction facility: $20.73 million
• Senior LVR: 73.5%
• Blended LVR including mezzanine: 79.4%
• Presales: 100% sold under a Put and Call Option agreement
The Challenge
Following acquisition, the approvals process extended beyond the original timeframe. This increased holding costs and introduced refinancing risk.
At the same time, the client needed certainty that once approvals were in place, the project could transition into construction finance without delays or additional equity contributions. Without early planning, the project risked funding gaps at a critical stage.
The challenge was to maintain funding certainty through approvals while positioning the project for a smooth and timely move into construction.
DFP’s Strategic Solution
DFP worked closely with the client throughout the full project lifecycle. During the extended approvals phase, DFP negotiated multiple extensions to the land bank facility. This ensured continuity of funding and removed time pressure while approvals were finalised.
In parallel, DFP prepared the project for its transition into construction finance. This included identifying lenders with the experience and balance sheet capacity to support a large-scale civil construction facility.
DFP coordinated the quantity surveyor and valuation reports to align consultant inputs with lender requirements. The team also managed communication between credit and legal stakeholders to keep the transaction moving.
DFP negotiated the retention and extension of the existing mezzanine facility so it could transition alongside the construction loan. This avoided unnecessary restructuring and maintained alignment across the capital stack.
Results and Benefits
The final funding structure delivered a senior construction facility of $20.73 million. The facility was structured at a 73.5% LVR, with a blended LVR of 79.4% when combined with mezzanine funding.
The client commenced construction without contributing additional cash equity. This preserved returns and protected capital.
By retaining mezzanine funding, the overall capital structure remained efficient and balanced. Funding aligned with the project timeline and supported delivery through construction.
With 100% of the project presold under a Put and Call Option agreement, the client entered construction with a clear and executable exit strategy. The structure delivered certainty, flexibility, and confidence at a critical stage of the project.
Client Experience
Throughout the transaction, the client valued DFP’s proactive approach and clear communication. DFP acted as a strategic funding partner, managing lender relationships, timing, and approvals risk on the client’s behalf.
Conclusion and Advice
This case highlights the importance of early planning and flexible funding structures when approvals timelines extend beyond expectations. By securing adaptable land bank funding and preparing early for construction finance, DFP protected the client’s equity position and ensured a smooth transition into construction.
For developers facing similar projects, engaging an experienced property finance advisor early can reduce risk and support stronger funding outcomes.
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.
