Background
DFP’s client is an experienced property developer and builder with a long-standing track record in metropolitan Perth. They have successfully delivered a wide range of residential and commercial projects, earning a reputation for quality, reliability, and the ability to manage developments through changing market conditions. Their strong pipeline reflects ongoing confidence in the Perth property market and reinforces their reputation for consistent delivery.
Project Overview
The project involved subdividing a strategically located site in Scarborough into nine residential land lots. The developer’s vision was to create a boutique coastal release that appealed to both local buyers and interstate investors drawn to lifestyle-driven opportunities.
Scarborough is one of Perth’s most vibrant beachside suburbs, renowned for its energy, white sands, and strong demand for well-positioned residential land. The development was designed to capitalise on this demand, offering a limited number of lots in a premium location where supply is consistently constrained.
Key Metrics
- Loan Amount: $3,855,682
- LVR Against Valuation: 72.5%
- Loan to Cost: 82.3%
The Challenge
The developer’s existing construction facility was reaching expiry, creating urgency to refinance and secure additional funds to complete infrastructure and titling works. They also needed an extended facility term to allow sufficient time for council and land title registration processes.
This combination of requirements made the transaction difficult to place. The request included a high level of interest capitalisation and a facility structure that many lenders were unwilling to support, particularly in Western Australia where appetite for elevated leverage was limited.
Lenders also required clarity around the exact costs to complete the subdivision. Without this certainty, there was concern that available funds may not be sufficient to achieve practical completion and realise the full value of the lots.
DFP’s Strategic Solution
To overcome these challenges, DFP adopted a hands-on approach to secure a funding solution that matched the developer’s needs, including:
- Risk management upfront: DFP worked with the developer to present a clear project timeline and address potential delays early.
- Detailed valuation support: A comprehensive breakdown of remaining civil and titling costs was requested from the valuer to provide certainty for lenders.
- National lender reach: DFP secured funding through a private lender in Melbourne, bypassing limited appetite in the local WA market.
- Developer strengths highlighted: The client’s proven track record and the project’s premium coastal location were emphasised in negotiations.
- Commercial facility design: The refinance allowed drawdowns on valuer inspections and invoices, removing the need for a Quantity Surveyor given the advanced stage of works.
This structure delivered a highly leveraged construction facility that met the developer’s requirements while maintaining flexibility to complete the subdivision efficiently.
Results and Benefits
The finance solution delivered by DFP gave the developer the certainty and flexibility required to complete the subdivision without interruption. DFP successfully arranged a $3.85 million interest-capitalised construction facility under a single first mortgage at 72.5% of the as-if-complete value, with no presales required.
The no line fee structure provided further benefit by keeping financing costs low, protecting the project’s profitability and supporting the developer’s long-term objectives. With refinancing in place, the developer was able to move quickly: civil works were finalised, statutory costs were covered, and titles progressed on schedule.
As the lots were released to the market, the project was well-positioned to take advantage of strong buyer demand in Scarborough. The combination of location, timing, and market appetite enabled the developer to achieve sales above the valuation benchmarks, significantly boosting overall returns and validating their vision for the boutique coastal subdivision.
Client Experience & Feedback
The client expressed confidence in DFP’s approach and confirmed they would recommend DFP to other developers. They highlighted the commercial and pragmatic way the facility was structured, which allowed the project to progress without disruption despite the challenges of an expiring facility and elevated leverage requirements.
Conclusion & Advice
This case demonstrates how tailored funding structures can unlock opportunities that might otherwise stall. DFP’s ability to navigate lender appetite, highlight project strengths, and design a facility around the developer’s needs provided the clarity and confidence required to progress the subdivision.
For developers, the experience highlights how external factors such as council approvals and titling processes can impact project timelines. Having a finance partner who understands these pressures and can structure facilities with the right flexibility ensures projects remain on track and positioned to take advantage of market demand.
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.
