Property Development Loan Guide

You should establish how much you can borrow and how can cover the costs before starting any development project. Property developers must understand finance and what lenders look for before they can start.

Remember that lenders look out for their safety. They want assurance that while they give opportunities for others to grow, they can as well without so much risk. Simply put, banks and lenders don’t just lend based on the project’s security. They also want to establish the track record of the development team.

The Basics

Lenders impose more stringent lending criteria for larger development projects. Usually, you will need to put in 20 per cent of the funds for a 2 dwelling project and 30 per cent for larger projects. The latter considered as commercial loans.

Development loans come with staged payments that need to be completed following the end of each regular building stage. These include:

the deposit,
base stage,
frame stage,
lock up stage,
fixing stage;
balance of development funds supplied on completion of the project

Finance for development projects are different from ordinary finance investments because you can often borrow the ongoing interest as part of your finance package. In other words, you do not cover the interest during the construction phase. Rather, you capitalise on the interest.

Also you may need different types of lending depending on the stage of the project. These include:

Development or acquisition loan to manage the purchase, development application and pre-construction costs
Construction loan for the project building
Investment loan for retaining the project as a long-term investment

At Windsor Capital Management, we can help you arrange everything especially capital access for your property development. We have been in the industry for many years guaranteeing our expertise for a wide range of property development projects.

Newcastle Overtaking Sydney As the Next Property Superstar

Sydney may have been the leading property market for many periods but a new player is in town: Newcastle. The region has become the next big thing thanks to the reinvention efforts that the government and the property industyr are making. Considerable investments have been devoted to transport, city foreshore rejuvenation, a revitalised central business district, an upsized university. The NSW Government also just devoted $6.5 billion to transform the region.

“Newcastle is on the cusp of transitioning from a great regional city to an emerging global city and we are doing our bit as a council to attract investment, jobs and opportunity,” quoted Lord Mayor Nuatali Nelmes.

Those looking for opportunities in Sydney may well benefit from shifting their focus to Newcastle. Property experts also claimed that buyers are flocking north.

“Construction is booming in Newcastle after the value of approved developments soared 70 per cent last year to take the total green-lighted to more than $3 billion over the past five years,” said Nelmes.

“Another bumper 12 months is expected to follow, with $106 million in building go-aheads in the first month of the financial year and $270 million in applications”.

Newcastle is capitalising on its education and tourist potential. In fact, the town has also started considering cruising.

“By the end of 2018, we’re going to see a new $13 million cruise ship terminal completed at Carrington. As Sydney reaches its capacity for cruise ships, this should significantly increase the existing $11 million that Newcastle gathers annually from cruise tourism,” said Kevin Mason, a senior buyers advocate with Propertybuyer.

The Australian property market continues to change. Don’t get left behind, consult Windsor Capital Management on how to take advantage of the opportunities. We can help you arrange everything especially capital access for your property development.

How to Fund Your Property Development Project

Property development is so capital intensive that funding has taken center stage. However, access to capital does not come easy especially following the global financial crisis. That’s why it’s important for property developers to understand how they can access proper funding. Take our step-by-step guide below.

1.Communicate properly.

Contact your funding provider and their preferred quantity surveyor (QS). This draws confidence from your lender or bank. If they see a solid team behind the property development project then access to funding can become easier.

2.Understand your and your financier’s finances.

The first step to understanding your financial development capabilities is to understand your own. Know where money comes from and how it can be utilised for your project. The same goes for your lender. You cannot afford your financier to go bankrupt in the middle of the project.

3.Get the right numbers.

A successful project relies heavily on planning. Have a clear view of how much the project will cost so you can budget accordingly. This mitigates risks and prevents anyone from going bankrupt. You can ensure project savings early in the design phases when changes still cost loss. Giving early feedback on construction costs, design options, and value management are very important.

4.Coordinate carefully.

Consult the right professionals. This will contribute largely to your success since they have experience on what you want to achieve. Be careful with picking your contractor and financier. Research on the most preferred contractors in the industry. This spares you from encountering dodgy professionals.

At Windsor Capital Management, we can help you arrange everything especially capital access for your property development. We have been in the industry for many years guaranteeing our expertise for a wide range of property development projects.

Beijing Capital Land Expanding in Australia

Beijing Capital Land confirmed plans to expand their reach in Australia amidst more stringent measures on capital flows.

“We will continue to strengthen our presence in Australia, and this year we’re considering entering Melbourne,” South China Morning Post quoted Tang Jun, president of Beijing Capital Land. The company is now working on several projects in different parts of Australia including Sydney and Brisbane. The move has reinforced Beijing Capital Land as one of the leading Chinese developers in the country.

“For the long term, we are very positive on Australia, given its receptive stance towards Chinese immigrants and buoyant economic activities,” added Bryan Feng, head of investor relations at Beijing Capital Land.

The official also said that fresh capital control on Chinese real estate purchases overseas will not impact the company’s sales considerably. According to Feng, around 80% of its customers are Australian residents.

Beijing Land Capital notes that around 10 to 15% of annual contracted sales in 2018 and 2019 should come from Australian property projects – thanks to portfolio diversification. The company also added that it has been pursuing local bank loans to fund its projects in Australia on top of drawing support from offshore US dollar bonds.

The China Securities Regulatory Commission also reportedly approved Beijing Capital Land’s mainland share listing application. This means that the listing process has been pushed. The company expects the it will be listed successfully under the mainland stock exchange come 2018.

If you have been on the lookout for property developments in Australia, then you have come to the right place. Windsor Capital Management has been in the industry for many years, gaining powerful insight on what could work best for property developers and investors. We have a strong portfolio and team that could help you.