Background
The client is an experienced property developer with multiple shareholders, each actively involved across different areas of the property market. With a growing portfolio and a clear focus on scalable residential developments, the group was seeking to optimise capital efficiency while continuing to expand their pipeline.
Project Overview
The project is a 20-unit apartment development located in Brisbane’s northern corridor. It comprises one-bedroom apartments designed with smaller, efficient footprints to deliver a more affordable entry point for first-home buyers and investors.
The project responds to increasing demand for well-located, lower price-point housing in Brisbane, particularly as affordability continues to tighten.
Key Metrics
Loan Amount: $7.4 million
Loan to Cost Ratio: 84%
Loan Term: 14 months
The Challenge
The project presented a unique challenge. While demand for affordable one-bedroom apartments was growing, this type of product had not been delivered in the area for several years. This meant there were limited recent sales to compare against, which led to a more cautious approach from both valuers and lenders.
At the same time, the developer had already committed a large amount of capital into the land through a low-LVR purchase, which reduced their ability to use those funds for other opportunities.
To keep their broader pipeline moving, the client needed a construction facility that could fund the build while also improving overall capital flexibility. This required careful structuring, as lenders often take a conservative approach in these scenarios.
DFP’s Strategic Solution
DFP focused on getting both the valuation and lender positioning right from the outset.
A valuer with strong local Brisbane experience was selected to ensure the project was assessed using relevant and realistic comparables, helping avoid overly conservative outcomes.
In parallel, DFP ran a competitive process across multiple lenders to secure the best possible structure while keeping pricing competitive.
This approach enabled DFP to deliver a construction facility that supported both project delivery and the developer’s broader growth plans.
Results and Benefits
DFP successfully arranged a $7.4 million construction facility that funded the full cost to complete the development while also improving the developer’s overall liquidity position.
This allowed capital to be redeployed into a new acquisition, enabling the developer to progress multiple projects at the same time.
Construction commenced without delay, and the developer-maintained momentum across their broader portfolio. The funding structure ultimately supported both project delivery and continued growth.
Conclusion and Advice
This transaction highlights the importance of structuring finance as a strategic tool rather than simply a source of debt.
For developers with significant equity tied up in land, the right construction facility can improve liquidity, unlock capital, and accelerate portfolio growth.
Image: Concept render for illustrative purposes only
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.
