Marshall White Projects Newsletter Edition 5

PROJECT MARKETING IN THE DIGITAL AGE PROJECT PROFILES PAST AND PRESENT

WHAT YOU SHOULD PUT IN AND LEAVE OUT OF YOUR HIGH DENSITY DEVELOPMENT DOES INVESTING IN PREFABRICATED CONSTRUCTION STACK UP?

ICONIC NEIGHBOURHOOD-LIVING AT THE HEART OF ARMADALE 9822 9999 | marshallwhite.com.au

EDITION 05 | 2015

Mark Dayman

Leonard Teplin

A WORD FROM THE DIRECTORS Looking back into 2014, the previous year has exceeded our expectations on a number of fronts.

The ‘off shore’ or ‘referral partner’ method of selling apartments had remained a developers preferred method of sale, particularly for projects within the CBD or inner city locations. So much so, that a number of project marketers are now transacting the majority of their sales offshore, leaving only a handful to sell through a local retail market.

Marshall White Projects constantly balance the ratio of offshore and local sales for our developer clients. Whilst often a developer's lending criteria determines a higher percentage of local sales, often a significant number can be derived quickly and cost effectively off-shore.

Throughout the year, an average sale price of $823,000 for off the plan sales (18% up on 2013), reflects a confidence in the off the plan market for developments within the ‘wealth belt’ that accommodates our four office locations, namely Stonnington, Boroondara, Port Phillip and Bayside.

for the Bensons Property Group (following the same team’s outstanding success at ‘Solstice’ – 138 Camberwell Road, Hawthorn East) and ‘Toorak Park’ at 590 Orrong Road, Armadale for Lend Lease.

Both developments will be heavily weighted towards the owner occupier market with both positions, infrastructure and amenities assuring each project will be an enjoyable place to live as well as an astute investment for long term capital growth.

With a new Victorian Planning Minister yet to determine a variation to a zone allowance or formalise a position with regard to the offshore purchaser, at a Federal level Treasurer Hockey recently announced changes to laws governing the purchase of Australian residential property by foreign investors.

Well positioned, keenly priced developments will continue to be very well received from buyer’s currently located throughout most parts of the globe, all eager to secure their slice of the world's most liveable city.

Marshall White Projects will launch two of Melbourne’s most keenly awaited developments, being ‘Vanguard’ at the corner of Tooronga and Dandenong Roads, Malvern

Again, we welcome your call if we can assist you with buying or marketing your off the plan development throughout 2015.

Mark Dayman Director, Marshall White Project Marketing Direct: 03 9832 1193 Mobile: 0409 342 462 Email: mark.dayman@marshallwhite.com.au

Leonard Teplin Director, Marshall White Project Marketing Direct: 03 9832 1191 Mobile: 0402 431 657 Email: leonard.teplin@marshallwhite.com.au

Every effort is made to provide accurate and complete information in Marshall White’s (trading as Marshall White Projects) technical and regulatory newsletters. However, Marshall White cannot guarantee that there will be no errors. Marshall White and its contributors to the newsletter make no claims, promises or guarantees about the accuracy, completeness, or adequacy of the contents of the newsletters and expressly disclaims liability for errors and omissions in the contents of this newsletters. Neither does Marshall White and its contributors to the newsletter assume any legal liability for any direct, indirect or any other loss or damage of any kind for the accuracy, completeness, or usefulness of any information, product, or process disclosed herein, and do not represent that use of such information, product, or process would not infringe on privately owned rights.

Ross

Lawrence Lawrance

Filip

Spotlight Ross Hams

Lawrence Yan

Filip Gacesa

Ross is a proven real estate agent and respected as one of the market leaders in off the plan sales – Ross has been responsible for more than $60million in project sales in the past couple of years. In addition to his incomparable experience in the marketing of new development projects, apartments and high–end townhouses, Ross works hands–on with individual buyers and sellers, earning consistent praise for his warm and engaging approach. His instincts and empathic nature enable him to quickly determine the needs of his clients, ensuring that each transaction is as successful as it is enjoyable.

Lawrence is a talented communicator.

Fluent in Mandarin and Cantonese and Malay, his personal enthusiasm for property investment motivates Lawrence to help his clients find suitable investment property, appropriate to each individual need.

They say if you want something done give the job to a busy person. It would be hard to find a busier person than Filip Gacesa. Currently studying for his Bachelor of Commerce/Law at Deakin University, undertaking his full agents licence while also working tirelessly with the team at Marshall White Projects, Filip is the epitome of a hard worker.

With a bachelor’s degree in mechanical engineering and after years of experience overseeing the provision of mechanical building services for the construction of high-rise towers and mega-malls, Lawrence now directs his skills to off the plan residential project marketing. Alongside his intention to assure hassle-free transactions for his clients, Lawrence’s willingness to listen makes doing business with him a pleasure.

Filip’s knowledgeable advice to investors and owner occupiers is tailored to creating investment solutions that will assist in growing their wealth. He has a long term passion for property and investment and the potential they offer for financial security.

TOORAK PARK 590 Orrong Road, Armadale

Iconic neighbourhood-living at the heart of Armadale We’re excited to announce the launch of Toorak Park Armadale, Lend Lease’s new Orrong Road development.

Located on Orrong Road Armadale, beside Toorak Park and next to the Beatty Avenue shops and Toorak Railway Station, the 2.5 hectare development site will be transformed into a luxury residential precinct of four leafy quarters, comprising 448 luxury apartments and 18 townhouses.

The masterplaned development has been designed by award winning, globally recognised architects Denton Corker Marshall, with the landscaped garden and common areas designed by local landscape designers Tract.

The grand vision is to create a vibrant new neighbourhood that celebrates and adds to the charm of Armadale’s streetscapes – and for the architects, the opportunity to apply state-of the-art design, materiality, convenience and beauty within such a distinctive setting was a once in a lifetime opportunity.

Carr Design, local interior designers renowned for smart, sophisticated and beautiful solutions, complete the line up of design talent at the Toorak Park project.

Armadale’s celebrated open space, beautiful gardens and impressive streets and homes is reflected indoors and out throughout the development, which blurs the lines between apartments and houses – perfect for many downsizers who don’t want to compromise on space and finishes.

All residences have a strong emphasis on maximising light, views and space in every room, boasting generous floor plans and balconies overlooking Toorak Park’s expansive grounds. Light and dark colour palettes are on offer, as well as state-of-the-art energy efficient appliances, 900mm high kitchen islands, timber flooring and bathrooms with a single stone finish.

Basement car parking and bike storage facilities will be available for every apartment, as is substantial visitor parking.

Once complete, the development will feature a blue stoned plaza with a convenience store and cafe, as well as a central boulevard, two village greens and public gardens that will be known as Central Common. We’ve already seen very strong interest in the project and encourage you to contact us for an exclusive VIP preview of the display suite ahead of the public opening later in the month.

Apartment size range: • • •

One bedroom apartments range in size from 55sqm to 88sqm Two bedroom apartments range in size from 75 to 107 sqm Three bedroom apartments range in size from 115 to 148 sqm

toorakpark.com

VANGUARD 803 Dandenong Road, Malvern East A prestigious address coupled with an uncompromising attitude that will undoubtedly set a new benchmark in luxury living. The stunning new Vanguard complex is near Monash University, Caulfield Racecourse, Caulfield Plaza Shopping Centre and Chadstone Shopping Centre providing a residential destination that will be the envy of all.

From master architects Fender Katsalidis, this breathtaking 18 level, 322 apartment complex is a work of stylish, contemporary architecture, while internally, each apartment will boast beautifully integrated living spaces, a Shannon Bennett endorsed VIP kitchen and spacious bathrooms.

A podium level gymnasium opens out into a lush landscaped, north facing garden terrace designed by TRACT landscape architects. The terrace design will feature native Australian species, engaging public art, a community garden, play areas, and BBQ facilities.

The building is a work of stylish, contemporary architecture characterised by a highly studied curved faรงade composed of recycled timber, glass, and articulated, textured and painted precast concrete panels. The pattern of its unique faรงade has been inspired by the rhythm and flow of pedestrian and vehicular movement around the building. vanguardmalvern.com.au

INQU 140 Cotham Road, Kew inquapartments.com.au

MAISON 9–17 Somers Avenue, Malvern maisonmalvern.com.au

LENNOX 25 Belmont Avenue North, Glen Iris lennoxgleniris.com.au

PARC VUE 1091 Plenty Road, Bundoora parcvue.com.au

Project Marketing in the Digital Age WITH THE RISE AND RISE OF ‘CHANNEL SALES’, BE IT LOCALLY OR INTERNATIONALLY, THERE ARE MANY REASONS TO ARGUE THAT THE RETAIL MARKET IS NOW SECONDARY IN TERMS OF SELLING APARTMENTS OFF-THE-PLAN TO LOCAL CUSTOMERS. Gone are the days where all you had to do was place an advertisement for an off the plan development in a metro publication on a Saturday. Eager buyers were once keen to thumb through the listings over an early morning café latte while mapping out the open for inspections at all display suites in and around Melbourne in the hope to be first in to secure their own little red dot on the floorplan of the next big thing in high-density residential living.

Digital portals have revolutionised how property information is delivered, providing a direct channel from the property seller to the buyer. It’s difficult to imagine life without the various internet portals which have now diversified to include not only residential or off-the-plan property for sale, but also properties for rent, an area dedicated to investors, key suburb data, share house listings, new homes/community listings, and retirement info. Layer upon layer of delicious content is needed to ensure digital portals remain relevant and most importantly optimised for the key search engines where a lot of consumers start their property search process - Google has approx. 100,000+ searches every month for the single search term “apartments for sale in Melbourne”.

While this digital revolution changed the way we connected project sales, the truth to the matter is that consumers continue to evolve at a greater rate than a single publisher can. Not only do the property stock levels create a cluttered market place for property listings within the digital space, but also the methods in which consumers use the digital portals are changing, with mobile and tablet growing at a rapid rate, as well as the growth in digital in general. In particular, the consumption of online video, which is changing how we need to approach taking Projects to market in the retail space.

What Does This All Mean?

In short - it means it is getting harder to ‘fish where the fish are’, and developers, Project Marketers and their associated media planners and buyers need to take a different approach to the ‘cookie cutter’ method which has worked so well in the past. They now must have a much deeper understanding of the intended target audience, how they consume different media channels within their ‘media day’ and most importantly, a benchmark and expectations prior to commencing any campaign. Focus should instead be on the expectations on a cost per lead and using an agreed conversion rate with the sales agent, ultimately focusing on a cost per sale so any developer or Project Marketer can track any paid campaign as the campaign runs, rather than spending the budget and looking back to work out what did or did not work.

What it does NOT mean, is that the fish are no longer there.

In fact, the size of the pond and the number of ‘fish’ within it is actually increasing as the population increases and the people benefitting the most from this currently are those profiting from the channel sales, rather than the developers themselves as they end up paying much higher rates of commissions. This ultimately results in a greater cost per sale than if they were to generate their own retail sales. Through smarter, more concentrated campaigns which focus not only on key real estate platforms, but by choosing the right media channels to hit the right consumer at the right time during their ‘media day’.

Jack Byrne is the Managing Director and founder of Hatched Media - a Melbourne based media agency which strives to combine innovative thinking with world-class client service in traditional and online media planning and buying.

With focus on the Property and Retail sector, Jack identified a dearth of genuine care, service and innovation within the Property Marketing industry, and set about changing this one client at a time.

This ‘handle with care’ approach is based around taking the time to uncover the client objectives, identifying and understanding the target consumer attitudes and habits, and arming the agency with high-powered tools and data for the digital age to ensure Jack and his team at Hatched can deliver on their promises along with the intended results for their partners.

Jack Byrne Managing Director 15/663 Victoria Street, Abbotsford 3067 e: jack@hatchedmedia.com.au p: 03 9017 9251 m: 0410 236 510 hatchedmedia.com.au

Past Project Profile OSCAR BRIGHTON 2 Well Street, Brighton

Let's Look at the Numbers Number of Apartments

26

Price Range

$465,000 to $1,399,000

Total Gross

$20,052,000

Architect

Rothe Lowman

Builder

Element Five

Website

oscarbrighton.com.au

Target Market

Empty nesters and professional singles

Product

No.

% of Total

Average size m2

Average price per m2

Average price

1 Bedroom, 1 Bathroom, 1 Car

3

12%

45

$10,627

$ 478,333

1 Bedroom, 1 Bathroom, 2 Car

1

4%

71.4

$10,490

$ 749,000

2 Bedroom, 1 Bathroom, 1 Car

4

15%

52.9

$10,417

$ 551,000

2 Bedroom, 2 Bathroom, 1 Car

11

42%

76.0

$ 10,371

$ 786,273

2 Bedroom, 2 Bathroom, 2 Car

1

4%

105.8

$10,161

$ 1,075,000

2 Bedroom + Study, 2 Bathroom, 1 Car

1

4%

100.6

$10,189

$1,025,000

3 Bedroom, 2 Bathroom, 2 Car

1

4%

100.6

$ 9,930

$ 999,000

3 Bedroom + Study, 2 Bathroom, 2 Car

4

15%

131.6

$10,469

$1,377,250

Designing a More Affordable and Sustainable City Ewert Leaf are currently designing over 30 three and four storey apartment projects throughout Melbourne for the increasingly discerning buyer. Clients are expecting a higher level of craftsmanship and design, and seek to occupy developments which respect the local context and strengthen the area’s sense of community. This attention to place as well as space is evident in our latest development on the corner of High Street and Spring Road in Malvern, which uses earthy materials in response to its close proximity to the park and references boutique Scandinavian design principles which reflect the market’s desire for high quality fixtures and finishes.

The great Australian dream of owning a home on a ¾ acre block is no longer desirable or achievable for many Melbournians, particularly first homeowners. Current trends identified by the government indicate that as household sizes diminish, the number of households – single and two people – will increase. A viable and increasingly attractive alternative is the inner suburban apartment, which currently exists in various municipalities and which enables occupants to live in the areas they choose at relatively affordable prices.

However, the benefits of mid scale multi-storey housing are being threatened by the introduction of new government zoning regulations. A recent article run by Fairfax titled ‘Developers label residential zones a disaster for Melbourne’ highlighted the negative impact that the new zones will have on the city. Not only does the so called’ locking up’ of suburbs contradict the government’s desire to create a more compact, sustainable and vibrant city, it will have a detrimental effect on housing affordability.

Homeowners currently face a range of barriers which prevent them from entering the housing market, and none is more critical than price. Despite the apparent over supply of high density housing in inner Melbourne, housing prices continue to soar. This is in direct correlation with demand for inner suburban apartments in a range of areas. These areas are not the urban pockets traditionally designated for high density living, including the Docklands and the CBD, but more established suburbs including Carlton, South Yarra, Toorak and South Melbourne.

Carlton has recently seen the successful insertion of a new mid-density housing development into the heritage rich area of Rathdowne Street. The Garden House, aptly situated opposite the Carlton Gardens, pays homage to the scale of traditional Carlton terraces and uses extensive glazing and layered surfaces to sensitively activate the street edge whilst maintaining a statuesque presence. This type of well detailed development can also be found in Copenhagen, where three and four storey podium buildings inject new life and amenity into traditional neighbourhoods.

This design focused approach enables architects to sensitively revitalise older inner suburbs whilst protecting parks, our heritage and our way of life. These developments harness existing facilities and infrastructure, particularly public transport, to create new centres for employment, social interaction and services. The activation of these areas has strengthened the immediate urban realm and allowed the wider area, not just the homeowner, to benefit both economically and socially.

The new zoning regulations have curtailed this positive growth and earmarked a limited number of sites for midscale development, despite there being many more suitable sites available. Add to this the expected population boom of 5 million people predicted for Melbourne by 2030 and the lack of variety in current housing stock identified by the government, and the situation for new homeowners becomes even more dire. Affordability will drive prospective home buyers to outer areas which lack amenity, social appeal and infrastructure. The negative economic, environmental and social repercussions of such a move will have long lasting consequences which are in stark contradiction to the strategic planning vision for Melbourne.

Our aim should be to create a legacy of design that strengthens Melbourne’s reputation for great architecture and urban design that responds to the challenges of today and serves the needs of the future. In order for Melbourne to expand successfully and sustainably, it is essential that mid-scale residential development and high quality architecture in established areas is supported.

Will Leaf 343 Ferrars Street, South Melbourne, VIC 3205 p: 03 9686 2100 m: 0417 198 101 ewertleaf.com.au

Past Project Profile KEY LARGO 106 Murrumbeena Road, Murrumbeena

Let's look at the numbers Number of Townhouses

12

Price Range

$520,000 to $640,000

Total Gross

$6,683,000

Architect

Perkins Architects

Builder

AG Construction

Target Market

Young couples and professional singles

Product

No.

% of Total

Average size m2

2 Bedroom, 2.5 Bathroom, 1 Car

10

83%

70.2

$7,756

$544,300

2 Bedroom + Study, 2 Bathroom, 1 Car

1

8%

82

$7,317

$600,000

2 Bedroom, 2 Bathroom, 1 Car

1

8%

87

$7,356

$640,000

Average price per m2

Average price

Does Investing in Prefabricated Construction Stack Up?

HICKORY DISCUSSES THE NUMEROUS ADVANTAGES MODERN OFF–SITE BUILDING METHODS CAN OFFER APARTMENT PURCHASERS. Despite advances in technology and its increasing popularity amongst the development community, for many people 'prefabricated construction' still means stuffy school portables, recycled shipping containers or cheap backyard granny flats. It’s therefore understandable that purchasers in the market for modern, luxury apartments might be apprehensive upon finding out that their new investment will be built 'prefab'.

The new crop of modular builders, however, are slowly changing these attitudes, using off–site building methods to produce incredibly high quality new developments – from single storey houses to multi–storey hotels and soon, entire residential skyscrapers. What we’re achieving here in Australia is starting to capture the attention of the rest of the world, with Hickory fortunate to have gained international attention for our multi–storey modular projects, particularly a 9-level building that was erected in just 5 days last November. Other low–rise modular builders are also doing remarkable things, including a company called Tektum that completed installation of an architectural cliff–top Sydney home in just 8 days.

Despite this international recognition, the adoption of modular construction practices have been slow to gain momentum here in Australia, whilst overseas it’s commonplace and in places like Japan, even highly sought after. That’s because these countries understand that building large components in a factory makes sense for a lot of reasons. For a start in the Northern Hemisphere, where snowy winters can halt construction for months on end, building in a factory means work can continue according to schedule without the hold up of inclement weather or limited hours of daylight.

There’s also far greater quality control working on the ground floor of a factory than there is with workers and materials going up and down a high–rise building. In a factory it’s much easier for managers to check for consistency, test components and rectify defects or issues before the building is completed. It’s also much safer for the workforce as they aren’t working at height or out in the elements everyday.

In Australia, commercial construction companies are turning more and more frequently to the off–site prefabrication of major building components. In fact, most people would be surprised to know just how much of an average high–rise building is constructed off-site.

The use of precast concrete panels is standard practice, with most construction methods utilising precast to form major elements of the building structure. Steel frames and trusses are also largely built offsite and transported to the site, as are large sheets of window and curtain wall on tower projects.

At Hickory, we’ve taken prefab a step further, developing systems to build entire high–rise hospital buildings, apartments and hotels in a factory that are simply craned into place and connected like giant Lego blocks on the building site. Having been builders for over 20 years using conventional methods (we were the HIA’s largest apartment builder for 3 years running), we realised that there must be a better way to build that is kinder on the environment, safer, cheaper and faster.

Whilst the bulk of our Hickory business is still based on traditional construction, we’re looking increasingly to 'prefab' any elements we can in order to build more efficiently. This includes building modular bathrooms in a factory, called 'pods', that are completely tiled, fitted with cabinets, vanities and baths or showers, then simply craned into place on site and connected into electrical and plumbing services.

For large–scale builders like us the use of bathroom pods makes a lot of sense; there are less people needed on the building site as all the skilled trades associated with a bathroom (tilers, glaziers, cabinet makers, shower screen installers, etc.) are now in a factory, and not taking up space on site. That’s up to twelve trades that don’t need to go up and down the builders lifts, park their vehicles on site, or bring material deliveries to the building. For people that live or work next to a construction site, prefabrication of bathrooms or even larger elements means the time it takes to construct the building can be halved.

But what does this all mean for investors or tenants in prefab apartments? Well for a start, if the entire structure of your building is prefabricated you get to move in 50% quicker than if your building was built using the old concrete and column method. There’s also a good chance your building will be more thermally efficient, so you’ll be able to wait a bit longer to turn on the heating in winter or the air-con in summer, saving money on your energy bills. The risk of builder’s defects requiring rectification can also be reduced with modular, as the quality control during construction is much more consistent.

IF THE ENTIRE STRUCTURE OF YOUR BUILDING IS PREFABRICATED YOU GET TO MOVE IN 50% QUICKER THAN IF YOUR BUILDING WAS BUILT USING THE OLD CONCRETE AND COLUMN METHOD. If your building has used prefabricated Hickory bathrooms, they’ve been engineered using a patented, state–of–the–art new method of construction that produces the base of the bathroom from one continuous 'monolithic' glass reinforced concrete piece. The falls in the base for natural drainage are already predetermined, and every base is made from the same mold, so all bathrooms are safe guarded against leaks. Because this method of construction saves time and money, the builder is often able to upgrade bathroom elements at no extra cost to the developer or customer. For example, Hickory can offer a fully tiled bathroom for the exact same cost as a plaster bathroom. We also build our bathrooms with lightweight Alucobond aluminium ceilings rather than the MDF ceilings that are generally used in bathrooms. This means we’re using aluminium and tiled elements in the apartment wet areas, which fare much better under moist conditions in the long–term than the plaster and paper products that are commonly used.

Hickory Group 101 Cremorne Street, Richmond, VIC 3121

p: 03 9429 7411 f: 03 9428 7376 hickory.com.au

For the environment, the benefits of modular construction are even more significant. As materials are ordered, cut to the right lengths, and material is warehoused and reused more commonly by modular builders than that of conventional construction firms, the amount of construction offcuts and waste can be reduced by up to 90%. To put that last figure into perspective, the Australian construction industry is the largest producer of waste annually (ahead of manufacturing, the services sector and Australia’s 7.8 million households). ABS statistics show the industry generated 19 million tonnes of waste in 2008–09 alone.

By those calculations, if all building projects used prefab construction, this figure could be reduced to less than 2 million tonnes, and the overall amount of waste produced by the entire country in a year could be lowered by 25%.

Whilst the current uptake of prefabricated construction for residential buildings in Australia currently only stands at 3% of new projects, with any luck we will begin to catch up to some of our foreign counterparts (in Sweden it’s 74% and in Japan it’s 35%). As technology advances and the world becomes more globalized, it’s inevitable new and improved construction methods will become increasingly commonplace in Australia. A part of this change will come from investors and new homeowners becoming more knowledgeable about new building methods and banks becoming more comfortable lending to developers and building contractors that use these new construction methods. Education is also key and in the last 2 years new bodies have emerged advocating modular construction methods, including PrefabAUS and META. The building and sustainability departments of many of Australia’s largest universities are also conducting research to help to drive this change.

As a property investor, being educated as to how buildings are made and the impact this has is a powerful tool and embracing these new methods of production can ensure you receive a higher quality, more cost–effective and environmentally sustainable development. When you think about the time, money and environmental savings these new construction methods can create, as well as the opportunities for the manufacturing sector, the benefits of prefab construction really do stack up.

Hickory was listed #5 in the BRW’s 2014 Most Innovative Companies List for their new Integrated Structural System for high–rise prefab construction. Find out more about Australia’s most innovative builder at hickory.com.au.

Past Project Profile NORFOLK 7 Somers Avenue, Malvern (stage two of The Stonington Estate)

Let's look at the numbers Number of Apartments

33

Price Range

$650,000 – $2,460,000

Gross Revenue

$31,606,000

Architect

Rothe Lowman

Builder

Element Five

Website

thenorfolkapartments.com.au

Target Market

Professional couples and empty nesters

Product

No.

% of Total

Average size m2

Average price per m2

Average Price

2 Bedroom, 2 Bathroom, 2 Car

24

73

79.2

$ 9,598

$ 759,875

3 Bedroom, 2 Bathroom, 2 Car

7

21

115

$10,572

$ 1,158,428

3 Bedroom, 3 Bathroom, 2 Car

2

6

210.5

$ 11,591

$ 2,440,000

Development Funding The Lay of the Land

One’s perspective on development funding largely depends on whether you’re a glass–half–full or half–empty kind of person. The positive is that all major commercial banks have been actively and consistently lending on property development for the last 18 months with terms that are stable and consistent. The negative is that they all remain at historically low levels of gearing and generally stringent on pre–sale requirements. The banks’ general lending parameters is to provide up to 75% of total development cost with qualifying pre–sales required to cover 100% of the debt.

Sourcing development funding has become far more complex and time consuming post–GFC and many developers now look to engage external expertise to assist with the management of this process. Correctly structuring and positioning a project before it is presented to a bank can be crucial in achieving a superior outcome than stock standard market terms. The banks are in a privileged position of being able to pick and choose the projects they will fund so it’s critical to assertively 'sell' the key risk mitigants of a project including elements such as product differentiation, geographic/demographic strengths, purchaser profile, and experience of the key stakeholders.

Most developers generally want to reduce the amount of equity they have to contribute to any given project. This is principally to enable their equity to 'work harder' for them

and across a larger number of projects. Return on equity has become a critical measure of a developer’s success and obviously the less equity required in a single project the higher the overall return on capital. This is where second mortgage funding can be of great benefit to a developer.

Second mortgage debt is priced at a higher rate than first mortgage debt but allows for total funding to be stretched to 90% of total development cost. Second mortgage funding is now widely accepted by banks provided it’s from a recognised second mortgage lender and is being used to release capital to progress the developer’s pipeline and/or secure new sites.

MaxCap Group are market leaders in 1st mortgage advisory/negotiation and one of Australia’s largest providers of 2nd mortgage funding. Please feel free to contact us on (03) 9620 2220 to discuss finance needs for your project.

Level 6, 303 Collins Street, Melbourne VIC 3000 t: 03 9620 2220 m: 0412 745 111 maxcapgroup.com.au

Scotch College Hawthorn

St Kevin’s College Toorak

Artist’s impression

SUPERBLY CRAFTED LIVING

Village

TOORAK

2 BEDROOM APARTMENTS FROM $845k 3 BEDROOM APARTMENTS FROM $1.35m TOWNHOUSES FROM $2.12m

An unrivalled collection of luxury residences now selling Enquire today 1300 133 015

Village

MALVERN ROAD

Toorak Station Orrong Orrong Reserve Reserve

Toorak Park HIGH STREET

SALES & DISPLAY CENTRE OPEN 11 AM– 3 PM DAILY 590 ORRONG ROAD, ARMADALE TOORAKPARK.COM