Large property portfolio with high holding costs.

The PropertiesThe clients own several development sites in Rivervale, Belmont and Kewdale and wanted to engage a builder with both property development and construction experience to help work out the best strategy for their portfolio. The clients were incurring substantial holding costs on their many properties, such as annual land tax and interest but didn’t want to just sell the properties, especially in a down market.

The ChallengeThe client wanted to develop the sites but have neither the experience nor the cash resources to take action themselves.
The clients needed a solution that would be suitable in the current property market in Perth.

The SolutionWe planned to develop the first 3 sites in their portfolio, starting with a large 4,200sqm site in Rivervale that was incurring over $16k per annum in land tax with minimal rental return.
We identified the zoning and set back requirements for the site and created a Master Plan that took into account the best product to take to market , the right yield (19 lots) to ensure sufficient land areas (180sqm) to support the best sized construction that would be accepted by the market for sales (165sqm of internal space).
The client would fund construction of one home and Orbic would fund the subdivisional works to create the 19 lots and fund the construction of 2 homes. The land would not be used as security for any of the Orbic funding and the client would be paid an agreed price for each parcel of land upon settlement.

The OutcomeOrbic developed a plan to progressively develop the clients several land holdings over the next 5 years to substantially reduce their ongoing holding costs, see them paid progressively for the development of their land with minimal cash input and no borrowing requirement from them.