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Case Study

Senior Debt Funding For High-end Manly Development

About

High-end residential development in the heart of Manly Beach with Gross Realisation Value of more than $115 million.

Challenges

Our client was seeking a non-recourse loan facility to limit the downside of the project and protect investors.

One of the key challenges for this project was also to secure an initial advance to assist with settling the site prior to the Development Approval (DA).

Typically, lenders require pre-sales to provide 100% debt cover for the project to mitigate risk.

Our client’s project was a high-end development and they required flexibility on pre-sale strategy to maximise revenues and get construction started.

Solution

Through our expertise in property financing, we helped secure a senior debt financing through a major bank for our client.

Results

Ocian were able to secure an initial advance to assist with the site acquisition, prior to DA, pre-sales being achieved, or builder being appointed. This eased the process of getting the project started on the right track.

We assisted in structuring the terms that allowed the required cash equity contribution from investors to be less than 25% of Total Development Costs.

Not only that, but the pre-sale requirement for this project was minimised, which allowed the client to access construction funding ahead of time and wait out COVID lockdown before launching further pre-sales.

The financial terms also included no recourse, or security, provided outside of the project entities and direct project assets. To top it off, Ocian has delivered on our promise to maximise the returns for our clients with market-leading pricing and terms.

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