Property Development Finance Australia
Structured Capital Solutions for Property Developers.
We advise developers seeking $5M to $100M plus in funding across structured debt and equity capital solutions.
This form is designed to help us assess project stage, funding requirement, security position, and capital pathway. It is not a standard loan application and does not represent an approval or offer of finance. Facilitation fees apply.
Development Funding for Australian Projects
We work with experienced property developers seeking finance in Australia for:
- Residential developments (townhouses, apartments)
- Mixed-use and commercial projects
- Land subdivisions and estate developments
Typical scenarios include:
- Projects requiring $5M to $50M plus funding
- Developers seeking 65 to75% total project funding
- Projects where traditional banks have reduced exposure
- Developers requiring mezzanine or joint venture capital
How Property Development Finance is Structured
Most development projects are funded using a layered capital structure:
Senior Debt (60 to 70%)
Primary funding typically secured by first mortgage lenders or private credit funds.
Mezzanine Finance (10 to 20%)
Subordinated capital used to bridge the gap between senior debt and total project cost.
Developer Equity (10 to 30%)
Capital contributed by the developer, either as cash or land.
Optional: Joint Venture / Preferred Equity
Used for larger or more complex projects where equity partners participate in the project.
Property Development Finance Australia Solutions
Senior Development Finance
Mezzanine Finance
Preferred Equity
Joint Venture Capital
Mezzanine Finance for Property Development
Mezzanine finance is commonly used where senior lenders do not fund the full project cost.
It sits behind senior debt and provides additional capital to complete the funding structure. The mezzanine investor sits above your equity in the capital structure. It is subordinate to the senior debt (which is repaid first).
Mezzanine funding is typically priced higher than senior debt due to its subordinated position and increased risk.
Typical characteristics:
- Higher return expectations than senior debt
- Subordinated security position
- Used to increase total project leverage
- Often structured with profit participation or fixed returns
Preferred Equity and Joint Venture Finance
- Preferred equity is not secured by a second mortgage over the property. The investor or partner is funding the project in return for equity.
- The investor will receive a fixed percentage of the projects profits as well as a top up of pyaments on their funds invested.
- The invesmtent partners capital amount is taken in the form of shares and ranks above the developers, but behind the senior lender.
- Developers seek out Joint Ventures equity partners when they are short of capital to cover the total development costs of the project.
- Property Development Finance Australia is suported by an extensive network of international Family Offices and Real Estate Funds seeking to partner with experienced developers.
We assess projects selectively based on funding viability and capital alignment
PROPERTY DEVELOPMENT FINANCE AUSTRALIA DEALS
Apartment Development
Project Cost $42M
Mezzanine $6M
Developer Equity $9M
Commercial Mixed use
Project Cost $65M
Senior Debt $42M
Mezzanine $10M
Equity / JV Partner $13M
TOWNHOUSE DEVELOPMENT
Project Cost $14M
Mezzanine $2M
Developer Equity $3M
Property Development Finance Australia $5M to $50M
Capital Advisory for Property Developers
Accrutus Capital acts as a capital advisor to developers, assisting with:
- structuring development funding solutions
- identifying appropriate capital providers
- negotiating funding terms
- coordinating transaction execution
We do not operate as a transactional broker. Our role is to align funding structures with project objectives and capital market conditions. We engage with a network of private lenders, credit funds, family offices and institutional capital providers across Australia and internationally.
Solutions for development projects that fall outside the traditional banks lending criteria.
- Accrutus Capital works with Tier 2 and Tier 3 property developers who present sound building projects around Australia with strong market fundamentals.
- Specialist security property such as hotel & leisure projects, childcare & aged center’s, industrial complexes, petrol station and other infrastructure projects.
- Land-banking sponsors to assist with purchasing site pending design, re-zoning and DA approvals.
- Alternative Capital solutions secured by 1st and 2nd commercial mortgages.
- Assessed on the strength of Sponsor’s property experience, site zoning use and approvals in place, postcode location and demonstrated population growth potential.
Property Development Finance Parameters
Loan Size:
$5 million – $80 million+
Loan to Cost:
Up to 75%
Loan to Value:
Up to 70%
Term:
12 to 36 months depending on project structure
Development Funding Process
- Initial property project review
- Confirm preferred capital structure
- Execute engagement of services
- Commence funding partner facilitation
- Review terms and conditions for approval
- Transaction execution
Bridging Finance for Property Developers
Bridging finance is commonly utilised by developers as a rapid, short-term funding solution, typically spanning a period of 6 to 24 months. Key uses of bridging finance:
- Immediate capital for land acquisition
- Covering immediate renovation costs
- Managing cash flow
When Traditional Banks Won’t Fund Your Project
As banks become more selective with their development finance, developers are presented with unique opportunities. Those with a solid grasp of alternative funding sources and the ability to structure deals effectively are in a strong position to benefit from these shifts in the market.
Many developers face obstacles when seeking finance, including:
- insufficient pre-sales
- higher leverage requirements
- complex project structures
- limited track record
- changing credit conditions
Alternative capital solutions offer the flexibility that traditional lenders often cannot provide. Property development finance Australia can access up to $100 million per month, enabling the rapid deployment of funds to suitable projects.
In many cases, alternative capital structures are used alongside senior lenders to complete the funding stack.
Property development finance Australia process involve a detailed review of the status of project. This assessment covers financial viability and the adequacy of contingency plans, with careful attention given to the risks of cost overruns and external pressures affecting the industry.
Property Development Finance Australia FAQs
What are the drivers of property development in Australia?
With increased immigration, an aging population and the regional spread after COVID, property developers seek to meet these challenges for specific building types.
These property projects include social and affordable housing, aged and child care centres, build to rent, hotel and accommodation projects, hospital and well-being precincts that meet Australia’s changing population demographic.
How much equity do developers need?
Most development projects require between 20% and 35% equity, depending on the funding structure and risk profile.
Can I obtain development finance without pre-sales?
Yes, some private lenders and capital providers will fund projects without pre-sales, subject to project strength and developer experience.
What is mezzanine finance in property development?
Mezzanine finance is a secondary layer of funding that sits behind senior debt and helps complete the capital structure.
What is the maximum LVR for development funding?
Typical total leverage ranges between 65% and 75% of project cost, depending on the capital structure.
What documentation is required for the initial review?
To prepare your property development finance Australia proposal, you should include the following elements in a step-by-step manner.
- Executive Summary with developer expexperience
- Description of the area, demographic, growth factors
- Market Analysis, marketing plan, pre-sales strategy
- Property development overview, current use, environmental challenges
- Engineering papers, re-zoning analyses, Development Approval
- Cash flow budgets, gross financial returns and valuations
- Project upside and probabilities
- Architect plan exhibits, maps and views
- Full feasibility study with full timeframes
- Statement of operations in pro forma
What is the difference between senior debt and mezzanine finance?
Senior debt is the primary funding secured against the property, while mezzanine finance sits behind it and fills funding gaps at a higher return.
How long does it take to secure development finance?
Timeframes typically range from 2 to 6 weeks depending on project complexity, requested documentation, valuation type & turnaround, and funding package structure.
Do private lenders require pre-sales?
Some private lenders do not require pre-sales, particularly where the project and developer profile are strong.
Can I use land as equity in a development?
Yes, land value is often recognised as part of the developer’s equity contribution.
What funding structures are available for larger projects?
Larger projects may include combinations of senior debt, mezzanine finance, preferred equity and joint venture capital.
How developers use bridging finance
Bridging finance is commonly utilised by developers as a rapid, short-term funding solution, typically spanning a period of 6 to 24 months. This form of finance is specifically designed to bridge the funding gap that arises between purchasing a new development site and either selling an existing project or obtaining long-term finance.
What if the development goes bad?
One of the key drivers and crucial elements in property development is securing the right financial partners. If there are signs of construction issues or financial stress, the best approach is to work with your financial partner at the earliest indication.
Identify: the problem and determine if a short-term or long-term cash flow issue.
Inform: the lender / bank / and equity partners before the loan is in default
Rectify: the problem and advise any plans for recovery or refinance
Re-negotiate: the terms with all financial partners to complete the development
