The client is an experienced property developer with a strong track record delivering boutique residential projects across coastal NSW markets. Their focus is on high-quality, design-led developments that appeal to premium owner occupiers and lifestyle buyers.
Following the successful delivery of a luxury villa project in Pottsville, the developer was preparing to transition from construction completion into the sales phase while maintaining momentum across their broader pipeline.
The project comprised eight luxury villas positioned within the tightly held Pottsville coastal market. Designed to capture strong owner occupier demand, the villas featured high-end finishes and a boutique development scale aligned with the surrounding environment.
Two villas were sold during construction, with six remaining at completion. The developer’s strategy was to bring the remaining stock to market through a structured and well-timed campaign rather than rushing sales at completion.
Key Metrics
Loan Amount: $12,735,000
Loan to Value Ratio: 70%
Project Type: Residual stock refinance
Stock Position: 6 completed villas remaining
Presales: 2 sold during construction
Loan Term: 12 months
As construction reached completion, the existing facility was approaching expiry. This created immediate pressure to reduce debt through rapid sell-down of the remaining villas.
The developer was conscious that rushing sales at this stage would likely lead to discounting and reduced overall project returns. The intent was to run a full marketing campaign to maximise value, not simply clear stock.
At the same time, a significant portion of the developer’s equity remained tied up in the completed project. Without releasing this capital, their ability to move forward on new opportunities and maintain pipeline growth was constrained.
Traditional lenders offered limited flexibility. Revaluation-based equity release was restricted, and funding structures were typically tied to enforced sales timelines and debt reduction requirements. This created a misalignment between the developer’s commercial strategy and available funding options.
Development Finance Partners structured a residual stock facility designed to refinance the remaining villas while repositioning the developer’s balance sheet.
A full revaluation of the completed project was undertaken, allowing the facility to be set at 70% LVR. This created an immediate equity release back to the developer, unlocking capital that had previously been tied up in the project.
The facility was structured over a 12-month term, providing a clear runway for a controlled and strategic sell-down. Interest was capitalised, removing the need for monthly repayments and supporting cash flow throughout the sales period.
Importantly, the structure removed restrictive conditions often imposed by traditional lenders. There were no minimum sales requirements and no early repayment fees, giving the developer full flexibility to respond to market conditions and execute their preferred sales strategy.
This approach aligned funding with the natural lifecycle of the project, transitioning seamlessly from construction completion into a value-driven sales phase.
DFP successfully secured a $12.7 million residual stock facility at 70% LVR, delivering both immediate liquidity and strategic flexibility.
The equity release improved the developer’s balance sheet position and enabled capital to be redeployed into future projects without waiting for full sell-down of the current development.
With time pressure removed, the developer was able to execute a considered marketing campaign, protecting pricing and maximising end sales values across the remaining villas.
The outcome preserved project margins while maintaining forward momentum across the developer’s broader pipeline.
This case highlights the importance of aligning funding structures with the final stage of a development lifecycle.
Residual stock finance, when combined with revaluation and equity release, allows developers to move beyond completion without unnecessary pressure. It creates the space to sell strategically, protect margins, and continue building pipeline activity.
For developers approaching completion, the structure of the exit phase is just as critical as the structure of the acquisition and construction funding.
This transaction represents the final stage of the funding journey. To see how the project was originally structured through construction, read the full case study here:
Solis Villas Construction and Development Case Study
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.