Property development finance

Planning a subdivision or multi-unit development?

Staged finance for subdivisions, townhouses, multi-unit and mixed-use projects. Lenders assess the whole project: total costs, end values, your experience and, for many banks, how many units are pre-sold. Senior debt from a bank or non-bank lender can be combined with mezzanine finance to reduce the equity you need, at a higher cost.

Talk to an adviser Development feasibility calculator

How it works

FeasibilityCosts, end values and margin tested before you commit
StructureSenior debt, any mezzanine, and your equity
ApprovalConditions such as pre-sales and cost reports met
DrawdownsProgress payments certified as the build proceeds
CompletionRepaid from sales, or unsold units refinanced

Who it suits

Subdivisions and land development
Townhouse and multi-unit projects
Experienced builders scaling up
Commercial and mixed-use developments

What lenders look at

A feasibility study: total costs, end value and margin
Loan-to-cost and loan-to-value on completion
Pre-sales, often required by banks
Your development track record and project team
Consents, a fixed-price build contract and a quantity surveyor's cost report

What to prepare

Tick them off as you go.

Feasibility and cost plan
Resource and building consents
Builder contract and programme
Pre-sale agreements, if any
Valuation on an 'as if complete' basis

Questions to ask

How many pre-sales are required?
How much of the cost will the lender fund?
Which fees and interest are added to the loan?
Will a quantity surveyor certify each drawdown?
Can mezzanine finance reduce the equity required, and at what cost?

Everyone's situation is different. Lenders weigh things differently and small details change the answer. An adviser can tell you where you stand with property development finance and what to do next.

Talk to an adviser

Run the numbers