The scenario
“Price the land off what is left after profit — not what the vendor is asking.”
— The Australian Property Development Handbook
A developer acquires englobo land with approval to deliver 48 lots. Delivering it in one hit would demand heavy cash equity; the goal is to stage the project so Stage 1 substantially funds Stage 2, and to recognise the rezoning uplift already banked in the land.
How we structured it
| Total project cost | $9.0m (land $3.6m + civils/costs $5.4m) |
|---|---|
| Gross realisation (48 lots) | $12.72m |
| Senior facility (staged) | $7.2m, recycled Stage 1 → Stage 2 |
| Equity (incl. planning uplift) | Balance of cost |
| BluCow brokerage (senior facility) | From 1.0% + GST (min. $20k) — ≈ $72,000 + GST |
| Senior rate (staged) | 9.00% |
|---|---|
| Loan to value (LVR) | 56.6% |
| Loan to cost (LTC) | 80.0% |
| Development margin | ~$3.2m |
| Margin on cost (RoC) | 35.6% |
| Return on equity (RoE) | ~178% |
| Equity multiple | 2.78x |
How our fee works: BluCow charges per facility — from 1.0% + GST on the senior facility (minimum $20k + GST), and from 1.0% + GST on any mezzanine or preferred equity (minimum $10k + GST), tapering to 0.75% above $10m. Where a lender also pays BluCow a commission on a facility, it is credited against the fee shown.
This case study is hypothetical and illustrative — figures depend on the project, security, presales and lender.
The outcome
A recyclable stage facility funds Stage 1 civils and is recycled into Stage 2 on registration, so the developer doesn't fund both stages at once. The planning uplift is recognised as soft equity, and a proceeds-release ladder returns a rising share of each settlement as group LVR falls.