SOME OF OUR MORE NOTABLE TRANSACTIONS INCLUDE THE FOLLOWING:
SITE ACQUISITION AND DEVELOPMENT
Our client identified an opportunity to acquire two adjoining duplex lots in Applecross for ~$2M. Their goal was to strata the combined holding into 5 terrace homes on a house and land package. Without any pre sales, this would not qualify for any traditional funding. We secured funding from a private lender for 50% of the acquisition price, with interest capitalised and no director's guarantees. The 12 month term of the facility allowed the client to work up subdivision approvals, plans and marketing. Whilst more expensive than traditional lending, it allowed the client to move quickly and without the need for personal guarantees. This has allowed them to bring the project to market much faster than would otherwise have been the case.
5 HOME RESIDENTIAL DEVELOPMENT
The client (a Chinese permanent resident) had acquired a development site for $1.1 million and required debt funding to complete a 5 home development at a total cost of circa $3 million. C4 was able to secure debt finance without pre sales, which allowed the client to commence building works immediately. Whilst the rate was slightly higher than traditional bank funding, the ability to commence development immediately and with more flexible due diligence, saved the client many weeks or months of securing pre sales and satisfying other lender pre conditions. The opportunity cost to the client was therefore significant and the ability to immediately proceed was a key consideration.
SUBURBAN SHOPPING CENTRE DEVELOPMENT
C4|Capital worked with a high net worth family group and closed a major construction financing for a significant new build shopping centre and hospitality venue. After modelling up the metrics and running a tendering process, we selected a preferred lender for the development finance, who had provided competitive terms.
The client then decided to reduce the gearing and sought improved terms as a result. When this lender could not provide the commitment that we required at that point in time, despite the improved metrics, we used our network and ultimately secured very favourable terms from a new lender new to the project. The improved terms provide substantial flexibility around the usual construction finance conditions such as quantity surveyor sign offs and the ability for the client to extract substantial equity upfront, given expenditure to date and low gearing. It also provided a formal commitment to a longer dated investment tranche to refinance construction debt, following practical completion.
Once again, this outcome strongly highlighted the benefits of a competitive process, not to mention the ability to quickly switch lenders during the process, thanks to our network, once we and the client felt that the execution risk was increasing unacceptably.
10 UNIT APARTMENT DEVELOPMENT
Working with a syndicate of private investors developing a 2 storey, 10 unit development in the southern suburbs of Perth, we secured very attractive terms, despite a difficult financing market for this type of project. We also identified an error in the valuation which did not apply the Margin Scheme to GST on sales correctly, thus causing a slightly lower valuation than should have been the case. This in turn required the developer to contribute more equity. After identifying the error and evidencing that the Margin Scheme did apply, the developer saved a significant additional equity contribution.
C4|CAPITAL'S LARGEST FINANCING DEAL CLOSES
This development of over 140 multi storey apartments in an iconic riverside location, represents our largest property financing to date. The funding package of circa $50M, included senior and mezzanine debt.
C4|Capital sourced the senior debt, provided financial structuring advice and assisted with credit approvals, documentation and condition precedent satisfaction. This included construction of a detailed ‘pre sales’ calculator, which enabled accurate forecasting of the required pre sale cover ratio, based upon a matrix of acceptable deposit tiers and FIRB sales allowed by the senior lender. The total funding package ultimately allowed the client to achieve higher gearing levels than would usually be the norm.
Whilst this was a complex transaction involving multiple parties, that took over 12 months to close, C4|Capital’s ability to project manage the financing process on behalf of the client, including providing strategic advice, regular detailed financial analysis and negotiation on all facets of financing structure and documentation, ensured continuity in the financing process. This successful outcome reflects C4|Capital’s commitment to providing its clients with exceptional service and the right advice, no matter how challenging the deal.
Successful financing of a 7 unit development in Belmont.
BOUTIQUE APARTMENT DEVELOPMENT
Working with a group of private investors developing a unique, 23 apartment beachfront development on the northern beaches, C4|Capital successfully secured a competitive development facility for over $5M. The financing achieved low cost of capital, target gearing levels and uniquely, no requirement for 100% pre sale cover, after a successful competitive tendering process.