The Developer’s Situation
A property developer based in the South Coast region of NSW was having difficulty securing funding for a development in the Shoalhaven region. The DA approved site was for 16 residential strata villas and a café. The villas are “tourist” short stay, pursuant to the zoning, which is SP3 Tourism.
After initially seeking bank funding the developer was faced with a stalled project when the bank had issues, mostly related to the “short stay” nature of the zoning.
Having come across Development Finance Partners (DFP) via LinkedIn, a meeting was arranged and DFP were engaged to expedite a funding solution that met the client’s requirements.
DFP recommended the client order a commercial arm’s length valuation which would provide definite project feasibility numbers to work by, and which would provide support for the development. DFP recommended a valuation firm that was well recognised and on the panel of a wide range of lending institutions. The valuation confirmed what the developer had already identified through his own research, that the South Coast region had a shortage of short stay accommodation within close proximity to the beach.
DFP were able to source private funding and following a review of the valuation and the completion of due diligence were able to produce a land bank funding proposal in the first instance which would be subsequently refinanced by a construction facility.
The Outcome
DFP completed a funding proposal for a land bank facility for six months. This enabled the developer to secure the site, commence preliminary works and marketing to enable presales to underpin a construction facility. Once this was achieved, the subsequent refinance into a construction facility would be underpinned by evidence of a market for the end product (of which there was a shortage of stock in this location).
DFP secured an offer for funding of the site within one week of receipt of the valuation and settlement has now been completed.
The developer, Tom Bishop, said, “Thanks to Development Finance Partners our project has secured funding in a regional area zoned for tourist use. To date DFP have been nothing short of a pleasure to deal with. They have been willing to spend time to understand the finance requirements with restrictions and to put a workable funding option together that would not be an option with any of the major banks. I look forward to continuing our relationship on this project and others.”
