Background
The client was an experienced property developer with a strong track record delivering successful residential projects throughout the Australian Capital Territory.
With a long-term focus on acquiring well-located development opportunities, the developer sought to secure another strategic site that would support the continued growth of their project pipeline.
Project Overview
The project involved the acquisition of a strategically located development site in the Australian Capital Territory for future residential development.
Rather than commencing construction immediately, the developer's strategy was to secure the site, preserve capital and progress the project at the most appropriate stage of the market. Achieving this required a land bank funding solution that maximised leverage while maintaining flexibility for future development.
Key Metrics
Loan Amount: $911,200
Location: Australian Capital Territory
Project Type: Future Residential Development
Facility Type: Land Bank Acquisition Facility
LVR Against Valuation: 75%
The Challenge
The developer wanted to maximise available leverage while preserving as much equity as possible for future project costs.
Securing higher leverage on land banking facilities can be challenging, particularly where lenders adopt more conservative policies for undeveloped sites. The funding structure needed to minimise the developer's upfront capital contribution while still satisfying lender requirements and supporting the project's long-term objectives.
For experienced developers building a pipeline of future opportunities, preserving working capital at the acquisition stage can play an important role in funding future approvals, holding costs and construction.
DFP's Strategic Solution
DFP assessed the developer's objectives and engaged lenders with a demonstrated appetite for experienced borrowers and strategic land banking opportunities.
Rather than accepting more conservative funding parameters, DFP negotiated a 75% LVR land bank facility that maximised available leverage while maintaining a straightforward funding structure.
The higher leverage reduced the developer's upfront equity contribution, preserving capital that could be allocated toward future planning, approvals and development costs as the project progressed.
Results and Benefits
Development Finance Partners successfully secured a $911,200 land bank facility at 75% LVR, enabling the developer to acquire the site while preserving valuable working capital.
The funding structure reduced the equity required at settlement and provided the flexibility to progress the project in line with the developer's broader strategy and market timing.
Most importantly, the facility positioned the developer to retain more capital for future project opportunities while maintaining momentum across their wider development pipeline.
Conclusion and Advice
This transaction demonstrates how the right funding structure can support long-term development strategies well before construction begins.
For experienced developers, maximising leverage during the acquisition phase can preserve capital for approvals, infrastructure, construction and future opportunities. Working with specialist development finance advisors can also improve lender access and funding outcomes where standard lending policies may be more restrictive.
What This Means for Developers
• Higher leverage can preserve working capital for future projects
• Land bank facilities provide flexibility before construction commences
• Preserving equity at acquisition supports long-term growth strategies
• Specialist lenders may offer stronger outcomes than standard bank policy
• Early funding strategy can improve future development flexibility
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.
