Background
The client is a private investor focused on strategic land investments in established regional markets. Their approach centres on identifying well located sites in areas experiencing steady population growth and ongoing development activity.
In this instance, the client acquired a commercial land parcel within the Bendigo market in regional Victoria.
Project Overview
The asset comprised a single commercial land parcel positioned within an emerging regional precinct experiencing increasing planning activity and development across surrounding sites.
The client’s strategy was to hold the asset while monitoring market conditions and broader precinct development, maintaining flexibility around the timing of any future exit.
Key Metrics
Loan Amount: $3,900,000
Loan to Value Ratio: 69%
Project Type: Commercial land banking investment
Location: Bendigo, Victoria
The Challenge
The client had originally secured funding for the acquisition with an interest capitalised structure designed to minimise holding costs during the early phase of the investment.
As the facility approached expiry, the investor was actively evaluating the potential sale of the site. Nearby development approvals and increased construction activity across the precinct had begun to strengthen market sentiment, creating a potential window for a profitable exit.
However, the investor required continuity of funding while maintaining flexibility to bring the asset to market if the right opportunity emerged. Many traditional refinance options introduce restrictive exit terms, prepayment penalties, or structures that complicate a near term sale.
The challenge was to secure a streamlined funding solution that would allow the investor to continue holding the land while preserving the ability to sell the asset without unnecessary constraints.
DFP’s Strategic Solution
Rather than pursue a full refinance with a new lender, Development Finance Partners worked closely with the existing credit provider to restructure and roll the facility.
Maintaining the established lender relationship allowed for a faster and more efficient approval process while avoiding additional legal, valuation and establishment costs typically associated with refinancing.
The revised facility transitioned from the initial interest capitalised structure to an interest serviced loan. This provided the lender with greater servicing visibility while allowing the investor to continue holding the asset during the marketing and potential sale process.
DFP’s deep understanding of the original transaction, combined with strong lender relationships, enabled the team to negotiate terms that balanced lender credit requirements with the client’s investment strategy.
The result was a funding structure that supported the investor’s land banking approach while maintaining maximum flexibility for a near term exit.
Results and Benefits
DFP successfully secured approval to roll the existing facility with a loan amount of $3.9 million at 69% LVR, providing the investor with ongoing funding stability.
By restructuring the existing facility rather than pursuing a full refinance, the client avoided unnecessary costs, delays and transaction complexity. The streamlined rollover ensured the asset remained funded while the investor prepared the property for potential sale.
Importantly, the structure preserved full flexibility to bring the asset to market if favourable conditions emerged. At the same time, it allowed the investor to continue holding the land through a period of increasing development activity in the surrounding precinct.
As neighbouring sites progressed through planning approvals and construction stages, the broader area experienced growing momentum. Maintaining ownership during this phase supported the client’s strategy of capturing land value uplift driven by regional growth.
Conclusion and Advice
This project highlights the importance of structuring finance solutions that align with an investor’s broader asset strategy rather than focusing solely on acquisition funding.
For land banking investors and developers, funding flexibility is critical. Markets evolve, planning approvals progress and new opportunities emerge. Finance structures must allow investors to respond to these changes without unnecessary restrictions.
Working with an experienced development finance advisor ensures facilities are structured to support both hold strategies and exit scenarios, providing investors with the flexibility needed to maximise value.
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.
