Property development finance broker

Townhouse and duplex development

Two to fifteen dwellings is the band most first and second-time developers start in, and it is where lender appetite runs deepest. With a development approval and a fixed-price build contract in hand, we place the loan against total development cost and keep interest capitalised, so you are not servicing it from cash through the build.

Where you already hold a completed project or two, we can approach lenders that waive qualifying presales below a set dwelling count, letting you sell into a finished product.

• Deposit and equity of around 25% to 35% of cost, commonly drawn from land already owned
• Loan-to-cost to about 75%, held under a 65% loan-to-GRV ceiling
• Progress draws released against quantity surveyor inspections at slab, frame, lock-up and completion
• Licensed builder, home warranty insurance and a defined defects liability period
• Residual stock loan available if a few dwellings are still selling at completion
• Individual strata or Torrens titles issued so buyers settle one at a time

Medium and high-density apartment development

Above roughly twenty units a project moves into a tier where the feasibility, the presale evidence and your delivery record all face closer scrutiny. Construction funding is usually held back until qualifying presales reach an agreed cover, so we sequence the capital raise around the sales launch and the senior lender’s conditions precedent.

Where bank presale hurdles do not suit the market, we look to non-bank development funders that price for lower cover, and we run the drawdown schedule with the builder and quantity surveyor through the program.

• Presale cover commonly set so senior debt is fully covered, often 60% to 100% of units under unconditional contract
• Qualifying presales limited to arm’s-length buyers on 10% deposits, with a cap per purchaser
• Senior debt to about 65% of GRV, any shortfall bridged by mezzanine or preferred equity
• Fixed-price design-and-construct contract with an established builder and bank guarantee
• Off-the-plan and foreign buyer deposits held in a controlled account
• Feasibility tested for a development margin above 20% of total development cost

Commercial and mixed-use development

Retail, office, industrial and mixed-use schemes are read on their pre-lease position, the strength of the feasibility and your experience in that asset class. Fewer lenders write this than residential, so placing it well matters. We line the facility up against an anchor pre-commitment and the build program, then set the exit around either a hold or a sale of the completed asset.

The commercial component often refinances onto an investment facility on practical completion, so we plan that takeout before construction starts.

• Anchor tenant on a registered lease of five years or more before first drawdown
• Weighted average lease expiry and tenant covenant weighed in the feasibility
• Loan-to-cost to about 65% to 70%, tested against a capitalised end value
• End value set by capitalising net passing rent at a market yield
• Longer stabilisation and leasing-up window funded within the facility
• Residual stock and fit-out incentives allowed for in the budget

Build-to-rent development

Build-to-rent is designed to be held and leased rather than sold dwelling by dwelling, so there are no presales to clear the debt. The facility is underwritten on the stabilised rental income of the finished building and on your record running residential portfolios, then it converts from a construction loan to a long-term mortgage once the block leases up.

We find funders comfortable holding the asset through stabilisation and structure the construction facility so that conversion is agreed at the outset.

• Sized on stabilised net operating income against a target debt-service cover ratio
• Lease-up period funded until occupancy stabilises, commonly around 90%
• Single-line ownership retained rather than strata subdivision of each apartment
• Interest cover tested at a stabilised yield in place of presale cover
• Long-term hold facility of 10 to 15 years fixed at the outset
• Amenity, letting and operating cost lines built into the feasibility

Mezzanine and equity gap finance

When senior debt stops short of total cost, mezzanine sits between the senior loan and your equity to close the gap. It ranks behind the senior lender and is priced for that subordinated position, and using it lets you commit less of your own cash and lift return on equity. The whole capital stack has to be agreed upfront, because not every senior lender will allow a charge behind them.

We structure the senior, mezzanine and equity together and bring in funders at each level who will sign an intercreditor agreement and work to the same program.

• Lifts combined gearing to around 85% to 90% of total development cost
• Priced above senior debt, often a coupon plus a share of the development profit
• Intercreditor deed or deed of priority agreed between the two lenders
• Interest capitalised and repaid from settlement proceeds on completion
• Facility term matched to the construction and sell-down period
• Preferred equity used where a second charge is not permitted

Our complete list of services

• Fund a land subdivision or lot development
• Develop townhouses, duplexes or apartments
• Borrow up to 65% to 75% of total development cost
• Draw progressively against construction milestones
• Fund commercial, retail or mixed-use development
• Structure a build-to-rent project
• Arrange mezzanine or equity-gap finance
• Build the full senior, mezzanine and equity stack
• Structure pre-sales or pre-lease requirements
• Review feasibility and gross realisation
• Fund civil works and infrastructure
• Plan the exit before construction starts
• Refinance out of a development facility
• Coordinate drawdowns with your quantity surveyor
• Identify non-bank development lenders
• Support first-time developers