Behind the Deal: Brighton VIC | $14.0m

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When construction halts unexpectedly, but your loan doesn’t, you need a funding partner who can see opportunities and set you up for success.

This developer had a vision. A boutique block of eight luxury apartments in Melbourne’s sought-after suburb of Brighton, providing the ideal lifestyle for residents. With wine cellars, luxury finishes, large outdoor spaces and sound-proof windows, he knew that once people experienced the level of quality, they would pay a premium price. For this developer, doing the product justice meant showcasing the finished product, and not discounting off-the-plan.

But while COVID lockdowns and supply chain disruptions delayed construction, his original loan matured to full term. He had already paid significant risk fees due to the delay, and he was facing penalty interest rates if he couldn’t restructure the loan.

He needed a partner that would enable him to complete construction, and gave him enough time to sell the apartments post-completion.

At Assetline Capital, we immediately saw the potential of the project, and knew our skills and expertise could get him back on track to realising his vision.

The details of the deal

Location

Brighton, VIC

Loan amount

$14.0 million

Term

12 months

LVR

70.0%

Purpose

Refinance existing construction loan & residual stock sell-down

Product

Construction & development exit loan

Type of development

8 luxury apartments

Exit strategy

Selldown post-construction

Because of our partnership approach, and technical understanding of the construction phase, we can solve complex problems. That’s why we’re one of the few lenders willing to step in mid-construction”

Andrew Vamvakaris, Director – Victoria

When you want to set new luxury standards in quality and interior design, selling off the plan is unlikely to give you the premium price that product deserves. This was also not the only development facing delays due to COVID, so we understood what was at stake – and how to resolve the challenge.

Our in-house construction team worked closely with the developer’s broker, and assessed what it would take to finish on the project. We developed a budget and timeline for each step and built in a contingency to cover potential price inflation. Allowing eight months for a sell-down period to cover post-construction, with the ability to repay early, we gave this developer flexibility, certainty and confidence that he could achieve premium sales for the apartments.

This hybrid loan structure, combining refinance and residual stock sell-down, was settled within a month. And it set this developer up for success.

The development is due to be completed in May 2022, with a view to exit the loan by early 2023.

If you’d like to discuss a construction, bridging or long-term loan scenario with us, please get in touch with our team.

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