Client Background
A experienced property development business with a large scale industrial subdivison in Sydney’s south east. Currently mid project with a range of assets including vacant land (future development site), completed for sale industrial units (residual stock) and leased (retained assets) industrial units. Debt was secured via several short term loans with non bank lenders.
The Challenge
How can we reduce holding costs across the project given these current short term loans needed repayment in a few months?
We needed to address several issues all at once including:-
• Retained leased units – reduce borrowing costs to allow long term retention for capital growth.
•Residual for sale units – allow another 12 months to sell remaining completed stock
• Land for future development – reduce debt and LVR to lower finance and holding costs.
We workshopped with our client and presented a logical approach that would reduce holding costs, allow more time to sell residual stock as well as take debt pressure off the future stages.
The Solution
CPC Lending Solutions working with brokers Stamford Capital executing the strategy delivered the following solution:-
• Loan 1 (leased retained stock) – $4.5m major bank lease doc, 6%pa, 3 year term, 45%LVR
• Loan 2 (residual stock) – $8m non bank loan, 9%pa, 12 month term, 75% LVR
• Loan 3 (land loan) – $8m non bank loan, 10 %pa, 12 month term, 55% LVR
The Outcome
This structured financing across bank and non banks enabled the client to:
• Enhance financial flexibility: The refinancing improved cash flow, supporting ongoing and future development initiatives.
• Maintain market stability: A controlled sales approach for the remaining units prevented market saturation, preserving property values.
• Reduce high-interest land debt: By applying the released equity to pay down debt on future development stages, the client lowered overall interest expenses and holding costs.
By leveraging this strategic equity release, the client effectively optimized their financial position, reduced costs, and maintained control over their development strategy.
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Loan Exit Strategy:
The remaining unit sales continue to pay down debt. Increasing rents and lower PBA cash rates over 2025 will allow more major bank debt on leased stock paying down expensive non bank debt.
Another strategic review will be undertaken by CPC Lending Solutions in 9 months time to continue to assist in rebalancing debt to lower their finance costs.
This case exemplifies CPC’s commitment to providing complexed development financing solutions through strategic thinking and our network of lenders. This enables our clients to leverage equity in their projects and achieve their development goals.
Here’s what the client had to say about their experience:
“David’s knowledge of development finance and proposed strategy was something we didn’t initially realise was possible. He showed a genuine will to assist in the best interests of the project’s success.”
Contact Us
Feel free to reach out with any general questions you may have about CPC and the services we offer.
CPC Lending Solutions is a development finance specialist. We help borrowers overcome their funding challenges by sourcing market leading loans suited to your unique situation. Contact us at info@crowdpropertycapital.com.au
Legal & Compliance
Crowd Property Capital Pty Ltd (CPC)
A registered company under the Corporations Act 2001, ACN 600 539 544
An accredited member of the Finance Brokers Association of Australia (FBAA) Member No M-352808
A licensed Corporation under the Property, Stock and Business Act 2002, Corporation License No. 10065109.
A member of the Real Estate Institute of NSW (REINSW)
David Lovato (Sole Director) holds a Certificate IV in Finance and Mortgage Broking and Property Services (Real Estate Agents License No 201 604 57 )
