No pre-sales funding; removing a hurdle in the project finance
|By Development Finance Partners / Matthew Royal|
An example of a nil pre-sales facility
A Developer was introduced to Development Finance Partners after having lengthy delays with a major bank and their protracted assessment process of several months due the this development being only the second project for the new developer, a new product being utilised in the construction technique, pre-sales requirements hurdles and being developed in a regional city where developments where slowly regaining ground due to unrelated town planning issues pre-GFC. There was also urgency to finance the parcel of land which was under option.
Development Finance Partner’s Directors Baxter Gamble, Matt Royal and Associate Director Bronko Kozel worked in partnership with the clients to understand the dynamics of the project, the new product being used and requirements for pre-sales. Each step was clearly understood to bring the development from concept to deliverable.
Private equity was introduced via Development Finance Partner’s private equity providers to settle the transaction thus removing the urgency, which then enabled the procurement via a securitised product to deliver a nil pre-sales facility, removing a critical hurdle in the project finance.
Subsequently the developer has secured 6 pre-sales without requirement to do so as a condition, thus providing leverage to control market position of the apartments.
26 Victoria Street
15 Inner City Living Apartments
Stromcorp Investments Pty Ltd
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
Featured articles /
- Presales affecting property developers and how you can overcome the pre-sale 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
- CREDIT ALERT – “THE PARTY IS OVER”