Prestige Property Development Finance

September 2018

Site acquisition and no pre-sale funding development finance

Red & Co. Finance recently assisted an experienced developer purchase and fund the construction of a high end townhouse project in Bardon, Brisbane.

The client had been looking for their next project for some time, with finding good value sites a tough ask in Brisbane at the moment. The site was purchased DA approved with most of the BA documentation already completed. Contract price was for less than statutory land value.

The project was for 3 high end townhouses which would be well suited to the prestige market in that location. Each townhouse will be sold for around $1,000,000 each.

Red & Co facilitated a competitive land settlement and construction finance deal for this client:

  • No Pre-sales required
  • LVR 70%
  • Variable rate, interest only of 8%
  • No line fee
  • Debt of Circa $1,900,000
  • Large Non-bank lender
  • Owner Builder-Developer OK
  • Delayed settlement of 3 months to enable land to settle simultaneously with construction commencement.
  • We arranged competitive valuation and quantity surveyor quotes
  • Developer return on equity of over 100%

This was a great deal for our client, which is clear from the ROE and ability to get going without presales. The cost of the debt is comparatively cheap when compared to the return they are achieving on their equity.

If you would like to find out more about the myriad of development finance options available in Brisbane, get in contact with Greg Turner on 0417 698 345 or [email protected] for a chat about your project or scenario.

 

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