Real Estate Project Financing for Affordable Housing Project Miranda NSW
$3,300,000 Construction Finance Acquired
Real Estate Project Background
Development Finance Partners (DFP) was engaged to assist its client to procure construction development finance for a boutique 8-unit project in Southern Sydney, being developed pursuant to the State Government’s Affordable Housing Scheme. Under the scheme, a portion of the accommodation (to circa 25%) is required to be made available for rent to middle income earners at a discount upwards of 20% of market, or for a portion of the occupier’s income, for 10 years. The target market includes individuals working in services such as teaching, child-care, nursing, police, fire and allied public and semi-public occupations where convenience to place of work is an important consideration.
In return the State Government, in conjunction with local Councils, provides both density bonuses and the opportunity for developers to build in low rise zonings.
THE KEY ISSUES
The client produced an innovative one-bedroom townhouse style design for the project. The combination of design and the still new concept meant that pre-sales would be difficult to achieve, buyers requiring a completed product to inspect prior to committing to purchase.
A financier who understood the concept, and who would most importantly be agreeable to funding without pre-sales was therefore a prerequisite.
DF PARTNERS’ ROLE
DFP was able to call on its experience in previously arranging funding for Affordable Housing Projects, as well as other large-scale projects, to procure this construction finance.
Based on strong relationships with its capital partners, DFP was successful in procuring real estate project financing in line with the client’s requirements, on competitive terms and conditions and without the obligation of pre-sales.
WHAT THE CLIENT SAYS
“I’ve used DFP on a number of projects now as from previous experiences, so I know that they are very good at what they do. I know that by working with them I don’t have to mess around. I trust the process and the relationship we have. The funding space moves too quickly for me to constantly monitor it myself, and they are on top of the market conditions and know which lenders are best to approach at any given time. Having them look after the finance means I can get on with what I do best. What they do is a full-time job, and because they do it all the time, they get economies of scale and have relationships they can leverage, which is why I continue to work with them.”
Jonathon Tyree, Director, Ashton Rowe
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