Resi Ventures has secured $27 million from Wingate House to fund construction of the initial stages of its $200 million residential housing estate Accolade in Rockbank in Melbourne's West.
It is very positive that private debt providers were prepared to support experienced developers as the banks continued to retreat from lending across Melbourne’s growth zones.
The partnership with Wingate is built from them having an in-depth knowledge of our business such that they can offer advice on how to de-risk our projects allowing them to tailor a funding package that offers flexibility so we can scale our projects dependant on demand.
Private funds will ensure that our construction can get underway sooner. With the right funding partner, we can construct multiple stages at once and get the land titled for our purchasers.
We have also awarded the Accolade civil contract to Bitu-Mill and will start construction in June. The first lots are expected to title in Q1 2019.
It is good to see private debt providers were prepared to support experienced developers as the banks continued to retreat from lending across Melbourne’s growth zones.
With banks tightening developer lending over the last 3 years experienced developers who have been loyal to the banks for a long time are now looking elsewhere but there will be tough times ahead for novice developers who may struggle to fund their projects. They are in for a rude awakening.
The lack of bank funding has opened lending opportunities for the private lenders such as the Hong Kong Hedge Fund OCP, Alceon, Goldman Sachs, Qualitas and the Liberman family-backed Monark Property Partners.
Red23 Research Manager Andrew Perkins found Rockbank’s expanding infrastructure platform - embracing road, rail and public/private realm - had underpinned a strong level of market acceptance.
He said Rockbank had recorded a 12-month price growth of more than 50 percent that saw the median land price creep over $300,000 for the first time in Q1 2018.
“It is a good news story. Rockbank still offers excellent affordability with its median land price below many surrounding suburbs and the broader Melbourne growth area median price of around $350,000,” Mr Perkins said.