Location: Surrey Hills, Melbourne

Project Overview:

• 2 luxury homes
• No presales
• Senior construction finance at 65% of end value
• Preferred equity finance at 80% of end value
• Overall 94% lend of total project costs

Challenges Addressed by CPC:

• Ensuring the lenders understood the capital stack was key
• Overcoming minimal developer equity to allow the project funding during construction stage
• Negotiating to fix the preferred equity returns allowed the developer to maximise upside sale profits
• Managing the loan settlement process with two lenders involved

Financial Solutions  by CPC:

• We went to market to secure the stretched senior construction loan first to maximise a cheaper form of capital.
• The preferred equity partner was introduced to the developer and they understood that there was multiple project opportunities with this developer.
• We settled the loan with minimal developer equity into the project, meeting the client brief.

Project Progress:

• The new project has commenced construction late 2023 with completion due late 2024
• The sale prices on the completed stock are expected to break the suburb record for attached houses in the area.
• A zero presale strategy with the construction lender was key to ensure developer revenue upside