Geelong Ritz developer turns from banks to fund project
It’s good to know that young homebuyers aren’t the only ones being turned away by the big banks.
Developers of a hotel apartment complex on the notorious Ritz site have turned to a non-bank lender to fund construction of the $55 million project.
Integrated Development Solutions boss Phil Petch has followed a path taken by hundreds of young homebuyers turned away by ultra-tight bank lending requirements in the wake of the royal commission into the nation’s banking and superannuation sector.
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The Liberman family-backed financier Monark Property Partners has agreed to bankroll the project to transform the 165-year-old Ritz site on Geelong’s waterfront into a nine-storey, 4.5-star hotel complex with 109 apartments, including 15 with dual keys.
Geelong’s notorious Ritz building is set for a substantial update aimed at making it a luxury accommodation centre for the city.
When the project was launched to the public in March, 2018, 80 apartments were pre-sold.
The project is now close to 90% sold with builder Ireland Brown taking control of the site at 10 Bellerine St, Geelong.
Construction is expected to be completed by late 2020.
Monark co-founder Adam Slade-Jacobson says as traditional bank lenders had retreated from the property development sector.
Monark Property Partners co-founders Adam Slade-Jacobson, left, and Michael Kark, right, with Integrated Development Solutions director Phillip Petch outside the Ritz Flats.
“The market has shifted to developers favouring non-bank lenders like Monark who provide greater levels of senior debt to fund construction with more flexible terms and greater certainty,” Slade-Jacobson says.
“This is at a time that it is increasingly difficult for developers to meet the pre-sales hurdles required by traditional banks.”
The funding was revealed as the nation’s financial regulator loosened prepared to loosen its rules on how banks had to assess homebuyers ability to repay debt.
Geelong’s notorious Ritz building is set for a substantial update aimed at making it a luxury accommodation centre for the city.
APRA is proposing removing its strict 7% floor rate, but would require lenders “to choose a prudent level based on their own portfolio mix, risk appetite and other circumstances”, providing relief for househunters struggling to meet the strict rules.
“As a result of this shift, Monark’s senior debt portfolio has more than tripled in the past two years.”
This article from the Geelong Advertiser originally appeared as “Developers turn from banks to secure funds for Geelong’s Ritz project”.
