Land Development Finance: Land subdivision Loans

Land Development Loans

A land subdivision is the way developers create new allotments. By subdividing land and creating new allotments the developer or land owner may increase the value of their land holding as the combined values of the new allotments exceeds the value of the original value of the original parcel(s) of land. Subdivisions can be as simple as subdividing one lot into two lots or a large tract of land into many allotments.

The developer does not always need to construct any buildings on the subdivided land to add value from the development. Often the value of the development is in the land not the building.

Land development can be less risky, more profitable, and less time consuming than undertaking a development that contains a construction component.

A land subdivision loan (a type of property development loan) is designed to assist a developer to finance subdividing a property into smaller allotments for on-sale. Once the land has been subdivided the developer may choose to hold onto some lots for further development, adding more value by the construction of residential, commercial, industrial or other buildings.

The process of obtaining a land subdivision loan can be very complicated especially for large projects. Oak Laurel can assist can assist developers, builders and other construction professionals to obtain and structure finance for land development.

We can assist in obtaining funding on a Land Development Cost (LDC) or Gross Realisation Value (GRV) basis.

We can assist with all types of projects including rural, industrial, residential and commercial developments:

  • Small or large subdivisions;
  • Residential, commercial or industrial units;
  • Strata titles, torrens titles, community subdivisions;
  • Physical improvements
  • Acquisitions;
  • Underground works;
  • Spec houses.

Banks are limited to smaller amounts of financing for undeveloped property and usually will not cover all of your development costs. Therefore, you may need private funding options. Our specialists can assist you with a range of funding options including bank and non-bank lenders, equity and private funders or a combination of them. For an attractive project, we may be able help you to obtain equity partners to fund up to 100% of your land subdivision project.

Talk to one of our specialists about getting your land development project funded.

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