$13.73m Construction Finance Cheltenham, VIC
Development Finance Partners (DFP) was engaged to provide a construction funding facility for a mix of 1, 2 & 3-bedroom apartments in a 4 level, 34 apartment building to be constructed in Cheltenham Victoria.
DFP had previously assisted the client with funding to acquire the site and undertake the development approval process.
The Key Issues faced for this proposal.
- Ongoing COVID-19 restrictions in Victoria generally, and impacts on work conditions etc. on building sites more specifically
- A conservative lending environment
- The preferred Capital Partner had existing loan exposures with the client
- The client required a facility with no presales
- The client was an owner, albeit highly experienced, builder
- Initial construction works had begun
- The client provided DFP with an overview of its funding requirements.
- DFP undertook due diligence on the project, the location, the marketability of the product and the clients’ financial position.
- A funding structure and outline was thereafter agreed, the key terms and conditions of which were incorporated in DFP’s formal Finance Proposal and Service Agreement.
- DFP was formally engaged by the clients under the Service Agreement.
- DFP held initial discussions with Capital Underwriters ahead of preparing and submitting a detailed Credit Paper with supporting documentation.
- DFP responded to requests for information during the Capital Partners due diligence and credit process.
- DFP negotiated a pathway for the Capital Partner to maintain its exposure limits with the client, by refinancing the site prior to expiry of the existing land bank facility (avoiding penalties and further charges), but delaying the initial construction drawdown until presales on other group projects had settled, which the client agreed to.
- The Capital Partner subsequently issued an indicative loan approval on terms acceptable to the client and in line with DFP’s Finance Proposal and Service Agreement
- DFP managed the ongoing client/underwriter relationship and assisted in the carriage of valuation, quantity surveyor reporting and loan documentation.
- The Capital Partner approved a $13.73m funding facility based on a 62.35% loan to value ratio with no presales
- 14-month Facility
- Site refinance and initial drawdown recently settled and construction well underway
- The client is delighted with the results delivered by the DFP Team.
Could your next project benefit from some expert development finance? Get in touch.
For expert advice:
Level 3, 31 Alfred St
Sydney NSW 2000
P / 02 8916 6246
Level 30/35 Collins Street,
Melbourne VIC 3000
P/ 03 8692 0082
Level 18, 175 Eagle Street
Brisbane QLD 4001
P / 07 3041 4136
- Development Funding – What are the real property development costs involved?
- Navigate today’s commercial property market trends and overcome the pre-sales hurdle
- Our Domestic Credit Squeeze – The Perfect Storm and Opportunity for the RBA & Property Developers
- How property developers can thrive in a changing economy
- Development Finance Partners recognised as one of Australia’s most innovative and fastest growing companies