15th June 2020
CPC recently secured a $3.6m acquisition and construction facility for a boutique townhouse site in Brunswick West.
This deal had numerous challenges.
CPC managed to obtain for our client a single facility without any pre-sales or a building contract in place. This allowed the developer to reduce risk around timing and focus pre-sales during construction.
The boutique size of this project being 6 inner city edgy townhouses was a big plus for this lender.
- Facility Limit $3.6m – As complete 70% LVR
- DA Approved 6 Townhouses mix of 2 and 3 bed
- Zero Pre Sales
- Interest rate 6.5%
- Line Fee 3.45%
- Term 15 months
Our client exchanged on the site in February 2020 prior to COVID and needed to settle the site in May 2020. We agreed with our lender a single facility. The key challenge was to achieve a panel approved valuation that looked beyond current market conditions and forecast sale prices over the coming year.
By ensuring the valuer only looked at direct comparable sales on premium surrounding stock the “as complete” valuation came in at similar levels to original assumptions made by our client earlier in the year. This was critical to ensure developer equity and stock pricing was maintained despite no pre-sales in place.
Despite the high LVR (70%) our lender committed to construction funding at site settlement stage and closed the deal confident the recent COVID disruption will not have a material impact on the successful completion of the project.
With a 15 month time frame this deal has substantially de risked this project for our client and now allows focus on maximising sales revenue during construction.
ABOUT CPC’s SERVICES
CPC provides a valuable service to developers by working with you up front to understand your project and development objectives.
Our network of lenders deeply understand risk and property cycles – they are open for business and adjusting their lending criteria to strengthen their loan quality book in this current market cycle.
To confidentially discuss your bespoke funding solution contact us today on email email@example.com or phone +61 434 932 634