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$14.2m- Apartment property development
Service
Property Construction & Development Funding
Client
Private Family Property Group
Location
VIC
Industry
Property Construction and Development Funding
The Challenges
A highly experienced property development group requested a funding solution that would provide them with options for a 65%- 75% “as-if complete” LVR and circa 80%-90% LTC for a development project that they were seeking to start in late 2022.
The project consisted Sixteen medium to high end apartments over a single level basement with a builder pre engaged with VM associated work during the Design documentation phase.
Our clients wanted to start construction works with sub 40% presale debt cover and for the contruction program to commence within three months of our engagement.
Our Solution
Our solution involved putting together a comprehensive development funding IM on behalf of the client group that was tendered to Five Non-Bank property lenders.
The funding request drew on our clients 30+ years family history of successfully completed property development activites that demonstrated to all lenders a high calibre client with capacity and capability to deliver the project and mitigate lender risk on higher than normal leverage ratios.
Clients Result
Term Sheets from four lenders were presented within a week of our IM being submitted.
We were able to differentiate all lenders and their offers to the client with reference to not just interest rates and leverage ratios but also on the funding table with regard to front and back ended equity met items.
Ultimately our clients partnered with an highly reputable Non Bank property lender that provide our client with extremely favourable terms that included:
- Leverage ratio of 70% LVR / 90% LTC / 40% PSDC
- Ability for clients to equity fund Sales commission Costs, Development Levies, Council contributions rather than funding be withheld to cover such items,
- No further pre-sale conditions,
- Interest rates and line fees below market rates.