Property Finance Principles August 2019 Overview Key terms in - - PowerPoint PPT Presentation
Property Finance Principles August 2019 Overview Key terms in development financing. Distinguish the differences between debt and equity. When developers apply for finance and information sought. Key risks for apartment
August 2019
Term Meaning LVR Loan to Value Ratio Loan/Market value of property TDCR Total Development Cost Ratio Loan/Total Development Cost TDC Total Development Cost Total development costs including finance costs CP’s Conditions Precedent Conditions which must to satisfied before drawing a loan Base Rate Base funding rate – cost of funds for the Bank – typically BBSY Margin The Bank’s margin on the loan – the Bank’s return Line Fee Fee payable on total facility limit – payable when loan not fully drawn Sunset date The date when presales must be settled in the sales contract
Equity
Senior Debt
acceptance of product
$000's Net proceeds $22,198 Development Costs Land acquisition or project related site costs $3,678 Construction $12,999 Contingency $650 Professional fees $660 Holding costs $80 Finance costs $616 Total Development Costs $18,683 Project profit $3,515 Proposed debt $14,000 Equity $4,683 LVR 61.61% TDCR 74.93% ROC 18.81% Presales $11,200
construction term
Security