An experienced Developer has requested a twelve month, $2.58m loan to assist with the purchase of a development site in Northbridge, WA. The purchase price of the site is $3.80m (excl GST) of which the borrower will contribute approximately $1.30m including deposit and settlement costs.

The loan will be secured by a registered first mortgage over two adjacent properties measuring a total of 964 sqm at a 64% loan to value ratio.

The Borrower will immediately seek to obtain the required plans and approvals to develop the site into an expected mix use 5 story development, accommodating 24 apartments (20 2x2s and 4 studios) and 2 commercial units.

The initial feasibility of the development project reports a gross realisable value of $13.0m, development costs of $9.2m and financing costs of $1.5m which results in an expected gross profit of $2.3m.

The Developer has successfully completed several development projects including house and land developments, land subdivisions and built form construction, with a number of other developments underway. The Developer is well known to the Platinum directors.

The loan is expected to be repaid via development finance for the construction of the apartment complex by a mainstream lender.

This loan facility is simply a land loan over the site and does not involve the construction of the development. This reduces the risk profile of the investment significantly.