Medical centre development finance and construction loans
Funding purpose built medical centres and consulting suites
Building a medical centre or consulting suites?
A medical centre is funded on what the completed building will be worth once it is tenanted, and that value is the rent roll capitalised at a yield. Who the tenants are and how long they are committed for is what moves that yield, which is why the leasing position matters as much as the build cost on these projects. We arrange development finance from $50K to $30M and we will tell you how your tenant mix reads to the panel.
We can help you:
- Fund purpose built medical centres and consulting suite developments
- Fund projects anchored by a pre-committed practice, imaging or pathology tenant
- Arrange facilities where a practice will occupy part and lease the balance
- Fund the site purchase and the construction under one facility
- Progressive drawdowns against a fixed price contract and quantity surveyor certification
- Capitalise interest through construction so the project needs no servicing while it is built
- Fund the consulting room fitout and the services a medical building needs
- Structure the exit as a sale to a healthcare property investor or a refinance to hold
- Arrange development exit finance where construction debt matures before the leasing completes
- Arrange finance from $50K to $30M nationally, from our Sydney office
Who we help:
- Established business owners who require finance between $50K to $30M
- First-time borrowers who need a beginner-friendly strategy
- Sophisticated borrowers and investors who need a unique strategy and deal structure
- Urgent, time-sensitive deals that need to move quickly
- Self-employed and trust-structured borrowers who need their income presented properly
- Commercial property owners with multi-tenancy plans
Speak to a specialist today
1,000+
loans settled
$2B+
funded
Medical centre development finance
Funding medical buildings from consent through to a tenanted centre
We work with developers, practice groups and investors building consulting suites and medical centres. These files turn on the leasing position more than on the construction, because the end valuation is a capitalised rent roll. How much of the building is committed, to whom, and for how long is the question the panel asks first.
Funding from $50K to $30M
from over 60 bank & non-bank lenders
- ANZ
- Bankwest
- Bluestone
- Bank of Queensland
- Commonwealth Bank
- Firstmac
- ING
- Macquarie
- NAB
- Pepper Money
- Suncorp Bank
- Thinktank
Medical centre development finance specialists
A medical centre is underwritten on who will occupy it as much as on what it costs to build. We can assist once consent is granted and an anchor tenant has signed. The projects we can finance include:
- Purpose built medical centres with several consulting tenancies
- Consulting suites developed for sale or lease to individual practitioners
- Buildings anchored by a general practice, imaging or pathology tenant
- Centres where a practice group occupies part and leases the balance
- Conversions of an existing building to consulting and treatment rooms
The end value of a medical centre is its rent roll capitalised at a yield, and that yield moves with who the tenants are and how long they are committed. A building two thirds committed to long tenants values differently to the same building fully let on short terms.
Why businesses choose Ardent Capital Group as their broker
Execution and strategy
Strategy first, then execution. We structure your deal properly and take it to the lenders that suit your situation, so you are not approaching each one yourself.
Clear advice for smart lending
Straight answers on LVR, structure and timing, including when a deal does not stack up.
A long-term partner
We stay with you well beyond settlement, with lasting relationships and ongoing support from the team.
Development types
Medical centre development scenarios we can help finance
Medical property has a deep tenant market and long occupancy once a centre is established, because practices fit out heavily and rarely move. That works in a project's favour at the end, and it is the leasing progress during the build that the lender watches.
Building around an anchor tenant
Most medical developments are funded off an anchor tenant committed before construction starts. A general practice, an imaging or pathology operator, or a specialist group taking a substantial share of the building gives the lender a rent line it can rely on and a reason the remaining space will let.
What the lender reads is the lease behind that commitment. The rent, the term, the review structure and the strength of the covenant all feed the end valuation, because a valuer capitalises the rent rather than comparing the building to nearby sales.
- Anchor tenant committed on an agreement for lease before construction
- Gives the lender a reliable rent line and a leasing argument for the balance
- Rent, term, reviews and covenant all read as part of the valuation
- End value capitalised from the rent roll, not estimated from sales
- Imaging, pathology and general practice are the common anchors
- The clearest position to take to the panel
How covenant and term set the end value
Two buildings with identical rent rolls can value differently, and the reason is the quality of the covenants and the weighted average lease expiry behind them. Longer terms with established tenants attract a firmer yield, and a firmer yield on the same rent produces a higher end value.
Be precise about what that does and does not change. A strong covenant supports the valuation and it supports the loan term a lender will write. It does not lift the percentage the lender will advance, because the facility is still capped by a share of end value and a share of cost, whichever is lower.
- Yield set by covenant quality and weighted average lease expiry
- A firmer yield on the same rent produces a higher end value
- Longer committed terms support the loan term the lender will write
- Covenant strength does not lift the percentage advanced
- The facility remains capped by the lesser of the value and cost ceilings
- Gross realisable value always quoted net of GST
Practices building their own premises
A common project is a practice group building a centre it will occupy, with the balance of the floor space leased to complementary services. That gives the project an occupier from day one and a rent roll that builds as the remaining suites let.
These files are assessed on the development ratios during construction, and the exit is usually a refinance onto a term facility against the completed building rather than a sale. Because the practice itself is a tenant, its own trading history forms part of how the lender reads the rent roll, so bring it to the conversation early.
- The practice occupies part and leases the balance
- An occupier committed from the first day of the lease
- Assessed on development ratios through the construction period
- Exit is commonly a refinance rather than a sale
- The practice trading history forms part of the rent roll assessment
- Suits groups that have outgrown leased consulting rooms
Leasing risk while you build
Few medical centres are fully committed at the start, and no lender expects that. What it wants to see is a realistic view of how the balance lets, supported by the catchment, the rents already agreed and evidence from comparable buildings.
The practical consequence is in the term rather than the approval. Leasing continues after practical completion, so the facility needs to run long enough to reach a stabilised rent roll before the exit. Setting the term to the build alone is where these projects get uncomfortable, and it is straightforward to avoid at the start.
- Full commitment at the start is not expected by lenders
- A supported leasing assumption tested against comparable buildings
- Rents already agreed carry more weight than a forecast
- Leasing continues past practical completion
- Term set to reach a stabilised rent roll, not just to completion
- Development exit finance available if debt matures first
Fitout, services and what the build has to carry
A medical building costs more per square metre to deliver than a comparable office, and the difference sits in the services. Consulting room layouts, plumbing to every room, waiting and treatment areas, accessibility, parking and the power and shielding requirements of imaging tenancies all sit inside the cost to complete.
Who pays for what between landlord and tenant varies by lease, and the quantity surveyor needs the answer before the facility is sized. A feasibility built on a shell cost with the fitout treated as an extra is the one that runs short before the tenants can occupy.
- Higher delivery cost per square metre than comparable office space
- Plumbing, power and services to every consulting room
- Imaging tenancies carry their own structural and shielding requirements
- Accessibility and parking requirements included in the cost to complete
- Landlord and tenant fitout split confirmed before the facility is sized
- Quantity surveyor report covering fitout, not just the shell
Stabilising the rent roll before the exit
A medical centre reaches its exit gradually rather than at a single moment. Suites let over the months after completion, the rent roll builds, and the building only reaches the value the feasibility assumed once it is substantially let on committed terms. That point is what the industry calls stabilisation, and it is what both exits wait for.
Whether you sell or hold, the work between practical completion and stabilisation is the same: sign the remaining suites on terms that hold their value. A sale into the healthcare property market prices off the stabilised roll, and a refinance onto a term facility is assessed against it. Naming your intended route early changes which construction lender suits, because they allow different room for that period.
- Value is reached progressively as suites let, not at completion
- Both exits price off the stabilised rent roll
- Remaining suites signed on terms that hold their value
- Sale into the healthcare property market, or refinance to a term facility
- Lenders differ in how much post-completion room they allow
- Development exit finance covers a shortfall between the two dates
Our complete list of services
- Medical centre development finance
- Childcare centre development finance
- Commercial and retail development finance
- Property development loans
- Construction finance
- Land acquisition finance
- Residual stock finance
- Development exit finance
- Medical and specialist clinic property finance
- Medical fit-out finance
- Commercial property loans
- Commercial refinancing
- Working capital and business overdrafts
- Business loans
- SMSF commercial property finance
Our process
How it works
✓We understand your scenario
We talk through the property, your business and timeline, and any complexity in your structure.
✓We find the right lender
We match your deal to the lender on our panel best suited to it.
✓You receive clear terms and guidance
We present indicative terms and explain what we recommend, and why.
✓We stay with you beyond settlement
We manage everything through to settlement, then stay in your corner well beyond it, with ongoing support from the team.
Lender features compared
How medical centre development loans compare across lenders
| Medical centre development loan feature | Major banks | Non-bank lenders | Availability |
|---|---|---|---|
| Maximum LVR (of GRV) | Up to 65% | Up to 70% | Standard |
| Total development cost (TDC) | Up to 80% | Up to 85% | Important |
| Anchor tenant pre-committed | Generally required | Strongly preferred | Critical |
| Partly committed at construction start | Limited appetite | Considered | Critical |
| End value basis | Capitalised rent roll | Capitalised rent roll | Standard |
| Term allowance for post-completion leasing | Tight | More flexible | Important |
| Site purchase and construction in one facility | Available on approved sites | Available | Common |
| Interest during construction | Capitalised | Capitalised | Common |
| Term | 12 to 24 months | 12 to 24 months | Standard |
| Approval timeframe* | 4 to 8 weeks | 2 to 5 weeks | Varies |
| Best suited for | Larger centres substantially pre-committed to strong covenants | Single buildings, partial commitment, practice groups building their own | — |
*IMPORTANT: These are indicative figures only. Terms, LVRs and approval timeframes vary with borrower capacity, security type and individual lender criteria, and are subject to change. Figures are a general guide, not a quote or an offer of finance, and not a representation that finance is available on these terms.
Frequently asked questions
Why work with Ardent Capital Group on your finance?
Ardent Capital Group brings the same method to every client: execution and strategy, clear advice for smart lending, and long-term growth. That means the right lender, structure and timing, straight advice so you borrow with confidence, and today's deal built toward where you want to be tomorrow. On a medical development the leasing position decides the file, and lenders weigh a partly committed building very differently from one another. We tell you where yours sits before it goes to anyone.
How much can I borrow to build a medical centre?
It is sized against the gross realisable value of the completed centre, net of GST, and against the total cost to build it. Lenders write to a share of each and lend the lesser of the two. Major banks reach up to 65% of gross realisable value and non-bank lenders up to 70%, against up to 80% and 85% of total development cost respectively. We arrange development finance from $50,000 to $30 million.
How is a completed medical centre valued?
As an income producing building. The valuer capitalises the rent roll at a yield drawn from comparable medical property sales, and that figure is the gross realisable value the facility is written against, net of GST. It is not a sum of individual sale prices the way a residential project is.
Does a strong tenant get me a higher loan amount?
Not directly, and we are clear about that. A strong covenant on a long term firms the yield, which lifts the end valuation, and a higher end valuation does support a larger facility in dollar terms. What it does not do is lift the percentage a lender will advance, because the facility is still capped by a share of end value and a share of cost, whichever is lower. Covenant strength also tends to buy loan term and approvability.
Do I need tenants committed before construction starts?
An anchor commitment is the position most lenders want to see, and it materially widens the panel. Full commitment is not expected. What supports a partly committed project is a realistic leasing assumption backed by the catchment, the rents already agreed and evidence from comparable buildings.
Can my practice build its own premises and lease out the rest?
Yes, and it is one of the more common projects we see. The build is funded on the development ratios, your practice is treated as a tenant in the rent roll, and the exit is usually a refinance onto a term facility rather than a sale. Your practice trading history forms part of how the rent roll is read, so bring it early.
Is this the same as a loan to buy a medical clinic?
No. A purchase is written against the value of the building as it stands, and our medical and specialist clinic property finance page covers that. A development is written against what the finished centre will be worth once tenanted and what it costs to build, which is a different lender panel and a different set of ratios.
Can you fund the land purchase as well as the build?
Yes. Where the site already has consent, the purchase and the construction can sit under one facility with one valuation and no refinance in between. Where consent has not issued, the land is usually funded first through a land acquisition facility and the construction funding follows once it does.
Does the fitout come under the same facility?
It should be costed in from the start. A medical building carries plumbing, power and services to every consulting room, accessibility and parking requirements, and in some cases the structural and shielding requirements of an imaging tenancy. Where the fitout split between landlord and tenant sits is set by the lease, and the quantity surveyor needs that answer before the facility is sized.
Do I have to service the loan during construction?
Usually not. Interest during construction is normally capitalised, meaning it is added to the facility rather than paid monthly, because the building produces no income until tenants take occupation. That is standard on development facilities.
How long does a medical development facility run for?
Commonly 12 to 24 months, set against the build programme plus a realistic allowance for leasing the balance of the building after practical completion. Leasing does not stop at completion, and a term set to the build alone is the common error on these projects.
Why did a major bank decline my medical development?
Frequently because construction sits outside what that particular lender writes, or because the project is below the size a bank development team is built around. Some lenders list construction as unacceptable security outright. Development is funded by a different lender panel from commercial mortgages, and matching a project to that panel is the work.
What happens if the building is not fully leased at the end?
That is a normal position and there is funding for it. The facility can be refinanced onto a term loan against the rent roll as it stands, or development exit finance holds the position while the remaining suites let. Planning for it early keeps you from leasing against a deadline.
What documents do you need to get started?
The development consent, any agreements for lease or heads of agreement with tenants, the fixed price building contract, your feasibility, the contract of sale or title for the site, and a quantity surveyor report where one exists. We can give you an indicative position from the consent and the leasing position alone.
Do you charge fees for your development finance service?
Most of the time, no. Where a project requires significant preparation due to its complexity, a small mandate fee may apply, and we will always be upfront about this before any work begins.
What areas do you service?
Although we are based in Sydney, we service clients across all major Australian cities, including Melbourne, Perth, Brisbane, the Gold Coast, Adelaide, Canberra and Hobart, along with their surrounding regional areas. Wherever your project is located, we can arrange your finance.
What other finance can you assist with?
Although our main speciality is property loans for business owners, we also assist with asset finance and working capital. On asset finance, that covers the plant and vehicles a building business runs, from excavators and scaffolding to site utilities and work vehicles. On working capital, we arrange business overdrafts, lines of credit and cash-flow funding to carry a project between drawdowns, to cover holding costs, and to pay consultants ahead of the next site.
We run a practice and have never developed before. Are you beginner friendly?
Yes. That is our core ethos, helping you understand the right strategy, structure and clear advice from the first conversation. A practice group building its own centre is one of the more common first developments there is, and the funding follows a well worn path. We will walk you through what the panel wants to see in your leasing position, how the end valuation is built and what the term needs to allow for, before you commit to anything.
Can you give financial advice?
No. Arranging finance and advising on financial products are two different disciplines, and we do the first. What we bring is the credit analysis lenders require, the structuring of the facility, and the strategy for putting your application in front of lenders whose appetite matches it.
Because we act as a credit representative under an Australian Credit Licence, we do not give financial product, superannuation, taxation or legal advice, and nothing we provide should be taken as such. Where your circumstances need that input, we are happy to work with your accountant, financial adviser and solicitor to understand the full picture before anything is submitted.
The information on this page is general in nature and does not take account of your objectives, financial situation or needs.
