Understanding the true development potential of your vendors property

DCIM100MEDIADJI_0308.JPG

cpc-logo  February 2019

In real estate sales vendors are relying on the exclusive agents’ ability to understand their properties  “highest and best use” – in a tough market even more so.
 
Historically local agents have shied away from researching and fully understanding planning controls such as site FSR, height limits and permitted uses under current zonings. This should be part of any agents core skill set, providing additional services around town planning and development to better assist their vendor is key in adding value.
 
A few years ago I enquired with a local agent about a prime dual fronted site in an exclusive beachside suburb of Sydney. The agent didn’t even mention the redevelopment potential of the block even though a few doors up the exact same sized block was under construction to build a duplex. This agent didn’t take the time to research his listing to its full extent, not fully marketing to developers really sold the listing short.
 
Agents need to ensure the best outcome for their vendors and fully understand and actively market the development potential of their listing if applicable. Simply placing STCA on your signboard should only be the start of your marketing plan to developers.
 
Attending local community events on potential rezonings, understanding the local LEP and DCP controls and having a good understanding of state government’s mandated growth areas will ensure you can advise your vendor of the potential current and long term value of their asset.

Having a go-to town planner that can look at your listing and provide you with a quick planning overview is also a great way to ensure you haven’t missed anything.

 

Your vendor will appreciate you explaining all of their options and providing them with as much information as possible so they can make informed decisions. You may be able to assist them with a short term equity release solution to allow them to hold their asset until the market improves.

If your vendor is open to development upside risk you could discuss the strategy of selling the site with DA approval. An alternate strategy could be to examine the “optioning up” of the property to a developer which could maximise the sale price in today’s market.

You can be sure they will appreciate your advice given you have demonstrated you haven’t just gone for the hard sell option.

 

Our mission is to provide greater opportunity to property industry stakeholders through financial technology. Our platform links like-minded property investors, developers and financial professionals allowing superior networking and business reach resulting in better deals. Contact CPC to better understand the full development potential of your site to maximise the value of your asset.

CPC’s Non Bank Development Funding Guide 2019 – Rates and Jargon Explained

 

screen-shot-2019-01-29-at-10-13-18-pm

cpc-logo  February 2019

 There are now numerous non-bank funding options available to developers and no shortage of lenders ready to deploy capital into quality projects with sound fundamentals. The sector has matured over the last 2-3 years but there are many pitfalls (and a lot of jargon which we explain in the guide) to navigate. 

This guide looks to inform and assist developers considering non bank options for their projects. 

DOWNLOAD CPC’s NON BANK FUNDING GUIDE 2019

 

About CPC

 Our mission is to provide greater opportunity to property industry stakeholders through financial technology. Our platform links like-minded property investors, developers and financial professionals allowing superior networking and business reach resulting in better deals. Contact CPC to better understand the full development potential of your site to maximise the value of your asset.

For Sale 17,562m2 Heritage Listed Development Site – Katoomba Village

screen-shot-2018-06-11-at-8-26-51-pmSt Mary’s College built in 1908 (original photo)
cpc-logo

 

Asset for Sale

An off-market opportunity exists to acquire a sizable landholding in the heart of historic Katoomba. This development site presents developers with enormous potential suitable for new seniors living medium density village combined with a  vision and passion for heritage restoration and historical architecture.

The mix of old and new would provide residents with a truly unique offering in the Blue Mountains within the growing and competitive seniors living market.

The site consists of 17,562m2 of land across three lots in North Katoomba, extremely well positioned the site has the following local amenities:

  • 150m to Katoomba Train Staton and Great Western Highway
  • 700m to Coles, Aldi,  Target and Big W and Katoomba Town Centre
  • 1.2km to Blue Mountains Hospital
  • Next door to public tennis courts, local bowling club and cinema complex

The site offers the following characteristics

  • Relatively flat land which is elevated enjoying district views to the north.
  • Not within a BAL bushfire prone area, landlocked with existing housing on all sides derisking potential bushfire hazards
  • Suitable for a range of accommodation options under current R1 – General Residential zoning.
  • Historic Renaissance Centre (formerly Mt St Mary’s College built in 1908) located at the top of the site. This building is listed on the State Heritage Register and would offer an exceptional communal facility and additional accommodation options to service the development.
 
 The ideal buyer will be a development group with substantial experience in seniors living facilities with a passion for heritage architecture. For a detailed IM on this site see below enquiry form.

 

 

Katoomba Development Site

 

*Refer to IM for additional information.

screen-shot-2018-06-11-at-9-07-19-pm

 

screen-shot-2019-02-16-at-8-16-49-am screen-shot-2019-02-16-at-8-17-55-am screen-shot-2019-02-16-at-8-18-51-am

1st Mortgage Debt Deal Sutherland Development Site – 9% returns

screen-shot-2018-04-16-at-10-20-10-pm
cpc-logo

 

16th April 2018

A registered first mortgage opportunity exists to provide funding returning 9% p.a. This project is located within 300m of the Sutherland Train station 25 km from the Sydney CBD.

The loan is secured over the existing group of properties and the overall site has DA approval to build apartments and will commence construction once presales targets are met. 

The maximum LTV on this loan is 63% and is secured via first mortgage. A copy of the valuation can be provided upon request. The development site consists of several residential parcels, the “as-is” assessed value of the site with development approval is $11.8M. The developer is highly experienced and currently undertaking marketing and presales.

The exit strategy for this loan will be to refinance it via a construction facility in 2019.

The minimum investment is $500,000 and interest is 9% paid monthly in arrears. This opportunity is open for a limited time only, further details are below.

INVESTMENT DETAILS*

Loan Facility Type Registered 1st Mortgage
Interest Rate (investor) 9% per annum
Total Loan Value $7.4M
Minimum -Maximum Investment $500,000 – $4M
Loan Term 12 Month Facility from December  2017 
Max Loan to Value (LTV)  63% 
Targeted Financial Close Settlement occurred 1st December 2017

WHO CAN INVEST?

  • An investment of $500,000 or more by any Australian resident or non-resident.
  • Any business that is not considered a small business (less than 20 people)
  • Professional & sophisticated investors
  • An Australian financial services licensee
  • A body regulated by APRA include banks, building societies, credit unions, and life and general insurers.
  • A trustee of a superannuation fund
  • An approved deposit fund,
  • A pooled superannuation scheme
  • A listed entity, or a related body corporate of a listed entity.

To obtain further an Information Memorandum (IM) for this investment please contact dlovato@crowdpropertycapital.com.au  or ph. 0434 932 634. *Refer to IM for additional information.

 

Investment Opportunity 15% Returns – DA Approved Childcare Centre

Child Care Centre Development 15% Returns
cpc-logo

 

26th February 2018

 

  • Investor Forecast Returns 15% p.a
  • Minimum Investment $500,000 AUD
  • Wholesale Investor Opportunity

This low risk, high return investment opportunity is available for investment now for a limited time until fully subscribed.

A Sydney based property firm with a national childcare development footprint is offering a 12-month preferred equity investment in a prime DA approved child care centre site.

Located in a residential growth corridor of Brisbane the project is well underway and is now substantially de-risked due to:

  • DA approved for a 97 place childcare centre
  • 20-year Agreement For Lease (AFL) now executed with a national operator
  • Build competitively tendered, within budget and contractor appointed
  • Debt finance to fund the construction stage secured with Westpac
  • Experienced developer with a very strong track record

The developer has funded all of the project costs to date off their balance sheet including initial site acquisition. 

Equity raising is being undertaken by the project sponsor to allow redeployment of equity into other childcare development opportunities elsewhere across the country.

The exit strategy for this development is to sell the completed childcare centre via public auction upon completion.

INVESTMENT DETAILS*

Capital Raising Type Preferred Equity
Forecast Investor Returns 15% p.a 
Investment Time Frame 12 months 
Minimum Investment $500,000
Investment Structure Fixed Unit Trust
Targeted Financial Close April 2018
Anticipated Distributions May 2019

REQUEST FURTHER INFORMATION

WHO CAN INVEST?

  • An investment of $500,000 or more by any Australian resident or non-resident.
  • Any business that is not considered a small business (less than 20 people)
  • Professional & sophisticated investors
  • An Australian financial services licensee
  • A body regulated by APRA include banks, building societies, credit unions, and life and general insurers.
  • A trustee of a superannuation fund
  • An approved deposit fund,
  • A pooled superannuation scheme
  • A listed entity, or a related body corporate of a listed entity.

To obtain further an Information Memorandum (IM) for this investment email dlovato@crowdpropertycapital.com.au  or ph. 0434 932 634. *Refer to IM for additional information.

 

 

1st Mortgage Debt Deal Southern Sydney Development Site

jb059_2brdual-key_20161026cpc-logo

 

15th December 2017

A registered first mortgage funding opportunity exists to fund a development project 11kms south of the Sydney CBD.

This opportunity is lead by highly experienced property development executives who are able to better assess risks and provide funding on loans with Loan To Value (LTV) ratios and Covenants that are reflective of the specific projects risk profile. The maximum LTV on this loan is 42% secured via first mortgage.

The developer has acquired the site for $26.5M in 2016 (100% equity funded). The total required facility of $11M is secured against the existing five lots. The maximum LVR is assumed to be 42% (subject to valuation).

The development is a 6,000m2 site yielding 168 apartments and is located 11km from the Sydney CBD. The site is 350m from the train station and 2km from Sydney Airport.

The exit strategy for this loan is the developer completing his current project in another suburb of Sydney. The developer has a solid track record of delivering apartment projects in Sydney (2012-2016 delivered 480 units over 5 projects, GDV $213M).

The minimum investment is $1.1M and interest is 10% paid monthly in arrears. This opportunity is open for a limited time only, further details are below.

 

INVESTMENT DETAILS*

Loan Facilty Type Registered 1st Mortgage
Interest Rate (investor) 10% per annum
Total Loan $11M
Minimum Investment $1.1M
Loan Term 12 Month Facilty from settlement date
Max Loan to Value (LTV) 42% (subject to valuation)
Targeted Financial Close Settlement occurred 1st September 2017

WHO CAN INVEST?

  • An investment of $1,100,000 or more by any Australian resident or non-resident.
  • Any business that is not considered a small business (less than 20 people)
  • Professional & sophisticated investors
  • An Australian financial services licensee
  • A body regulated by APRA include banks, building societies, credit unions, and life and general insurers.
  • A trustee of a superannuation fund
  • An approved deposit fund,
  • A pooled superannuation scheme
  • A listed entity, or a related body corporate of a listed entity.

To obtain further an Information Memorandum (IM) for this investment please contact dlovato@crowdpropertycapital.com.au  or ph. 0434 932 634. *Refer to IM for additional information.

 

Selling your Development Site? 5 Things you should consider…..

 

cpc-logo

 

 

September 2017 

Written by David Lovato

More and more developers these days are asking themselves should I sell one (or more) of my sites and consolidate operations? Why would a developer sell their lively hood? Are they in trouble? Are they too stretched? What’s happening to their business?

There are many reasons why a developer may consider selling a site (raw or approved) but they have usually decided to curb expansion plans or had unforeseen delays on existing sites or need to free up capital to complete other projects. If the developer goes about it the wrong way it can greatly tarnish their brand and market perception.

Here are 5 things to consider before listing your development site with an agent:

1. Is there any demand for my site?

If your site is located in an area of future oversupply be prepared to not find a buyer. Banks and private lenders are ruling out funding certain suburbs of Sydney. Limited ability for an incoming developer to obtain finance means your pool of buyers is extremely limited.

2. What’s my pricing strategy? Can I still make money on the site?

If you have purchased a site within the last few years and got a DA approval then you know exactly how much the site owes you.  Site values peaked in 2015 so many sites bought at the peak may not re sell for the same value. You should trying put aside your emotions, agents will always pump up the sale price but talk to valuers and development managers. They know how much a site is worth, you should be ready to accept a fair price. Don’t get greedy or your strategy may backfire.

3. Do I really want to advertise this sale with a major agency?

Signing an agency agreement with one of the big agents is like pulling your pants down. You are exposing your business to speculation that things are not going as planned and you will pay for the privilege. You will be assured of a vast database of buyers (none qualified) and you will run an expensive print and media campaign. A scattergun approach that exposes your business in this delicate situation is not the answer. A targeted and swift off market campaign is a better strategy to keep you divestment plans private, find qualified buyers and free up your capital ASAP.

4. My site is DA approved, it must be worth more?

In todays market more often than not developers are looking for raw sites, the market has peaked and smart developers are looking at sites for the next cycle. Expert developers will have their own brand and strategy and your DA adds no value to the transaction. The time and effort spent on getting the approval has no doubt been considerable but putting emotions aside and seeing it through the buyers eyes will help manage expectations.

5. Understand your buyers financial position

Once your site is for sale you will receive a wide range of offers. Some will be high and others extremely low and opportunistic. You should take a vested interest in reviewing the companies behind all of your offers, you must understand your bidders. It is likely a high bid is from an operator who is willing to pay more to ride out the cycle, the risk is their financial capacity to settle. Most land banking developers will not need finance and they will not pay over the odds – they are probably your underbidders.

 

Written by David Lovato from Crowd Property Capital, CPC is a peer 2 peer platform providing capital funding channels for Australian property development. For more information visit www.crowdpropertycapital.com.au

 

 

 

 

 

 

 

The new Chinese investors about to make Australian foray

cpc-logo

 

Written by Michael Cranston, AFR July 2017

 

At least 10 Chinese investors and developers who are yet to make their mark on Australia’s property scene are preparing to make an entry despite a recent slowdown in corporate activity driven by China’s upcoming National Congress and tougher foreign investment restrictions imposed by Chinese regulators.

New federal and state taxes on foreign buyers and tighter lending restrictions have also created negative sentiment for potential Chinese developers and investors. However, JLL’s head of China desk, Michael Zhang, said many Chinese real estate companies were still very serious about investing here.

“Australia continues to be a major investment destination for Chinese capital and many Chinese real estate companies are serious about having some footprint in Australia,” Mr Zhang said.

In a report called The Future of Chinese Residential Developers in Australia, JLL conducted analysis into the 10 largest residential developers yet to enter the Australian market.

 

chinadevelopertable

 

Among the top 10 are Hong Kong-based Sun Hung Kai with a market capitalisation of $56 billion and Henderson Land, which recently paid a record $4 billion for a car park in Hong Kong. Other names include Evergrande and transportation business China Merchants Group.

“Some of the Chinese residential developers on this list are already showing interest in the Australian market or are involved in Australian industries outside of the residential real estate sector,” JLL senior analyst for residential research in Sydney and author of the report, Vince De Zoysa, said.

“We have already seen some of these firms enter Australia through other industries, in particular infrastructure. This allows them to establish a local presence in Australia in their core industry before moving up the risk and reward curve into residential development.”

A key driver for these developers will be the health of the foreign retail buyer market for new apartments in Australia. The federal budget changed the rules so that developers selling new multi-storey dwellings are now capped at vending 50 per cent of the total development to overseas buyers. Foreign owners will also start to incur a capital gains tax of 12.5 per cent when selling their main residential asset.

Interest from China remains high

“Despite increased taxes, tighter lending measures on development finance and limited availability of senior debt to overseas developers, the level of interest remains high for Chinese developers,” Mr Zhang said.

While Juwai.com has recently forecast Chinese buyers to spend $104.5 billion on global property this year, a significant fall from last year’s record high of $133.7 billion, Mr Zhang said that was not representative of a new wave of Chinese developers and investors.

“Australia continues to be a major investment destination for Chinese capital,” he said. “Australia’s average deal size is smaller than that of the US and the UK, which makes investing here accessible to investors of all sizes.

“Increasingly Chinese developers are seeking ready-to-go opportunities with existing DA or planning outcomes, thereby minimising planning risk and bringing clarity on project life cycle.”

Chinese corporate activity has slowed recently as a result of the upcoming 19th National Congress to be held in October. The tougher foreign investment restrictions imposed by Chinese regulators on $US1 billion-plus deals are still in place.

25 Glasgow Avenue Bondi Beach – Unique Raw Development Site Opportunity

25 Glasgow Avenue is for sale by auction 8th April 2017

25 Glasgow Avenue is for sale by auction 8th April 2017

cpc-logo

 

A development site with the opportunity to build two executive residences (STCA) is for sale by auction on 8th April 2017. 

Located in the heart of Bondi Beach moments to the sand, surf, boutique shopping, and cafe precincts the property offers investors a solid value proposition.

Key investor information

  • Existing 3 Bedroom house on a 418m2 parcel with 18m frontage.
  • Raw development potential for two executive residences with car parking, extensive landscaping and plunge pool (STCA).
  • Strong rental yields post-acquisition, highly rentable existing 3 bed residence moments from the beach.
  • DA precedent for dual occupation design based on neighboring properties.

Whether your objective is to develop to sell both dwellings or live in one and sell the other this is a compelling investment opportunity.

The below information provides a concept design that has been produced in consideration of existing planning controls.

An artists Impression of the possible redevelopment of 25 Glasgow Ave Bondi Beach (STCA)

An artists Impression of the possible redevelopment of 25 Glasgow Ave Bondi Beach (STCA)

 

Basement and Ground Floor Design

Basement and Ground Floor Design

The concept design allows off street parking for two cars, generous open plan living areas combined with a spacious outdoor rear deck area, plunge pool, and outdoor shower area. The front study could also be used as a 5th Bedroom.

The upper level design includes generous sized bedrooms and an attic level.

The first floor and an attic level.

The first floor consists of three well-proportioned bedrooms, the master and rear bedroom have their own private balcony. Functional use of the roof has allowed a large 4th bedroom or teenage retreat in the attic space.  

screen-shot-2017-03-19-at-8-21-22-pm

The above table summarises the proposed design based on the current planning controls of Waverley Council.

For further due diligence information on this property:

Email  dlovato@crowdpropertycapital.com.au 

Phone +61 434 932 634

Disclaimer: No enquiries have been made with Waverley Council regarding the suitability or acceptance of this  or any potential Development Approval. While much care has been taken to ensure that the data presented is accurate investors should make their own enquiries. This information should not be relied upon for valuation purposes.

Existing property at 25 Glasgow Ave Bondi Beach

Existing property at 25 Glasgow Ave Bondi Beach