Leveraged For Value: Case Studies
130 Apartment Developments In Sydney
Other Case Studies
- Leveraged For Value
130 apartment development in Sydney
- Upfront Integrated End2End Funding
Premium 12 townhouse project in Melbourne
- Take-Out Solutions
Multi-format Shopping centre project in Eastern Melbourne
- Land Owner JVs
Development site in prime Melbourne suburb
- Builder JV arrangements
Mixed-use project (residential, hotel, commercial) in Melbourne
- Creative Structures
Land subdivision project in Brisbane
Solution Type: Leveraged For Value
- Leveraged development funding structure
- Combination of Senior Debt + Mezzanine Debt or Preferential Equity
Target Customer Benefits
- Designed to minimise cash equity from Sponsor – as low as 5% of Total Costs
- Far lower pre-sales than via Banks
- Maximises Return on Equity plus high multiple-x payback on equity deployed
- Speed to market via expedited pathway to Construction
- Enhanced risk management– spread capital across multiple ventures
Scenario Summary
- 130 apartment development in Sydney
- Total Development Costs excl Financing (TDC) of $90m & GRV of $115m (excl GST)
- Sponsor typically used a major bank and put in 20%-25% of TDC as cash equity (i.e. $18m-$23m), plus had to secure 80% Debt cover via Pre-sales (i.e. approx. $60m-$65m in pre-sales needed)
- Customer wanted to commence construction earlier + deploy less equity
Our Solution
- A leveraged funding structure requiring only $8m as cash equity from Sponsor plus only 35% Debt cover (< $30m in pre-sales)
- Sponsor makes $15m profit on equity contribution of $8m (i.e. 2.8x payback) against counter-factual (Bank funded scenario) where Sponsor makes $20m profit but puts in c$20m equity
- Plus…Sponsor commences construction 6 months after acquiring the land due to reduced pre-sales
Other Case Studies
- Leveraged For Value
130 apartment development in Sydney
- Upfront Integrated End2End Funding
Premium 12 townhouse project in Melbourne
- Take-Out Solutions
Multi-format Shopping centre project in Eastern Melbourne
- Land Owner JVs
Development site in prime Melbourne suburb
- Builder JV arrangements
Mixed-use project (residential, hotel, commercial) in Melbourne
- Creative Structures