Landmark Project in Melbourne, VICTORIA

Landmark Project in Melbourne, VICTORIA

Medium Density Residential Development (Settled in 10 days)

Issues

• Client had an unencumbered site and a Development Consent for 23 units and a ground floor retail shop.  They had been issued with a Terms Sheet from a major Bank for construction funding with the 60% debt cover already achieved (10 presales)
• On the strength of that the Client commencement construction with his own funds.  The Builder also completed further works from his own cash flow
• The Bank shifted the goal posts to 100% debt cover
• The Client was left dangling with outstanding builder payments, stalled construction, no funding and with his own cash resources tied up in the project.

Scope

• Development Finance Partners was engaged to find a solution
• Complete project feasibility including identification of works completed to date, payments made to builder and payments outstanding
• Model the project cash flow with a reconciliation of Total Development Cost, Debt and Equity allocations
• Site visit with Builder to agree current position, outstanding payments and strategy
• Produce an Interim Funding Solution and a Cost to Complete Construction Funding Solution.

Results

• Development Finance Partners secured an Interim (6 month) Funding ($2.5m)
• The Offer was to make good all outstanding payments to the Builder and to fund the next two progress payments (this satisfied the Builder and works recommenced)
• The Financing model identified the equity in the project and the underlying strength in the metrics of the proposal which will underpin a subsequent Construction Funding approval
• The settlement of the Interim funding was  achieved in a period of 10 days from the Client approaching DFP