Background
The client is an experienced property developer and investor with over 30 years of experience in site amalgamation, residential development, and strategic property acquisition. With a strong track record across complex projects, the client was focused on unlocking capital from an established landholding while maintaining flexibility for future development outcomes.
Project Overview
The security comprised a strategic land bank in Sydney’s prime Eastern Suburbs, consisting of seven contiguous residential houses. The site is subject to an existing development approval for thirty seniors living apartments, with ongoing negotiations to increase density to up to sixty apartments.
The project represents a long-term repositioning opportunity within a tightly held and high-demand residential market. The developer required a funding structure that recognised both the underlying land value and the future development potential, while allowing for continued strategic negotiations with planning authorities.
Key Metrics
Loan Amount: $32,800,000
Loan to Value Ratio: 75%
Structure: Lo-doc residential facility
The Challenge
The transaction presented a number of complexities that required careful structuring to align both lender appetite and client objectives.
The client was seeking to refinance an existing bank facility that was priced at a highly competitive rate, meaning any alternative solution needed to remain commercially attractive while delivering additional flexibility. At the same time, the requirement for a 75% LVR facility needed to support both the refinance of existing debt and a significant cash out component.
The nature of the security introduced further complexity. The site comprised multiple adjoining residential properties with an underlying landbank and future development value. However, funding needed to be assessed on an “as is” basis, rather than a higher project-driven valuation, due to one property associated with the development approval not forming part of the security pool.
In addition, the client required a low-doc structure supported by an accountant’s letter, alongside monthly interest servicing rather than capitalisation or prepayment, which is more typical within lo-doc funding scenarios. The combination of high leverage, specialised security, residential pricing expectations, and tailored servicing requirements made this a challenging proposition within the current lending market.
DFP’s Strategic Solution
DFP approached the transaction by engaging directly with a preferred capital partner, working collaboratively to navigate each layer of complexity and align the structure with the client’s objectives.
A lo-doc residential facility was structured to deliver the required leverage while maintaining a competitive interest rate. The facility was designed to accommodate monthly interest servicing, providing the client with greater control over cash flow, and included no penalties for partial or early repayment to preserve flexibility as the project evolved.
DFP maintained an active role throughout the entire process, coordinating the valuation, managing information flow, and negotiating terms directly with senior executives within the capital partner. This hands-on approach ensured that both the nuances of the security and the client’s strategic objectives were clearly understood and reflected in the final structure.
Results and Benefits
The final outcome achieved all of the client’s key requirements, delivering a $32.8 million facility at 75% LVR alongside a cash out component exceeding $12 million.
The structure provided a competitive interest rate within a lo-doc framework, combined with monthly interest servicing and no early repayment penalties. This combination is rarely achieved at this scale and provided the client with a high degree of flexibility.
Importantly, the facility unlocked significant capital while maintaining control over the asset, allowing the client to continue negotiations around increased density without pressure from funding constraints. The ability to align funding with both current value and future strategy positioned the client to optimise the site’s long-term outcome.
Client Testimonial
"I take this opportunity to thank you and your competent team in arranging the senior debt facility successfully for one of my controlling entities
DFP, you have performed meticulously beyond and above my expectation from the commencement of the procurement process
It’s been absolutely my pleasure in dealing with you since 2014 and I look forward to collaborating with you and your competent team in procuring finance for my property development transactions (whether debt or quasi-equity) for the years to come."
Conclusion and Advice
This case highlights the importance of aligning funding structures with both current asset position and future development strategy. Transactions involving specialised security, high leverage, and tailored servicing requirements require more than a standard lending approach.
DFP’s ability to leverage strong relationships with both the client and capital partner, combined with deep market knowledge, enabled a solution that balanced flexibility, pricing, and structure. For developers managing strategic landholdings, the right funding partner can play a critical role in unlocking value while preserving long-term optionality.
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.
