Posts

CPC Secures Development Funding in Melbourne’s Brunswick West

 

 

 

 

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.

 

Deal Metrics

  • 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 info@crowdpropertycapital.com.au or phone +61 434 932 634

 

 

 

Core Logic – Monthly Housing and Economic Update Sept 16

corelogic

The monthly update on the state of the national housing market has just been released. The key findings can be summarised as

  • Residential real estate underpins Australia’s wealth and has reached $6.7 trillion
  • The annual rate of capital gain has slowed from its peak but remains quite strong
  • Values continue to fall in Perth and Darwin on an annual basis whilst rising across the remaining capital cities
  • Turnover: capital city transaction numbers have continued to trend lower
  • The decline in capital city rents continues with asking rents down 0.5% over the past 12 months
  • Lending to owner occupiers and investors has started to pick-up again

To read the full report click here 

Harnessing Potential – Alternative Lending Market in Australia

cpc-contact

 

KPMG has commissioned a report undertaken by the University of Sydney’s Business School  of over 500 alternative finance platforms in 17 Asia-Pacific countries and regions, capturing an estimated 70 percent of the visible market. As the first comprehensive study of the Asia-Pacific online alternative finance market, this research contributes to the growing body of data supporting the region’s potential.

Click here to view the full report.

Some key questions about the marketplace lending in 2016:

  • Are individual or business borrowers using marketplace/ peer-to-peer lending because they have failed to obtain nance from banks, or in fact do they prefer the speed, flexibility and services offered by the alternative finance platforms?
  • Do businesses that raise finance via an alternative finance platform perform better in terms of profitability, revenue and job creation against businesses that rely on traditional funding channels?
  • From a credit analytics perspective, how are alternative finance platforms using new forms of data to ascertain the creditworthiness of borrowers?
  • Are platform credit risk modelling and underwriting facilities sufficiently robust – particularly in comparison with traditional finance providers?

Read more