Brisbane mixed-use development facility.

A Brisbane-based developer with an established residential track record had identified a mixed-use site in an emerging Brisbane precinct. The site offered strong feasibility (a combination of residential apartments, ground-floor commercial tenancies, and a small hospitality component) but the precinct's early development stage created a structural challenge that took conventional construction financing off the table.

The major bank construction lenders the developer had used previously required 80% residential presales coverage to commence drawdown. The precinct's early stage meant presales activity was running at approximately 35-40%, strong for the location but well below conventional lender thresholds. The developer faced a binary outcome: find an alternative capital structure, or release the site.

The developer engaged Colossal Gold to structure an alternative.

Three factors made this transaction structurally challenging.

First, the project was non-conforming in three dimensions, mixed-use composition, emerging precinct location, and lower-than-conventional presales coverage. Each individual factor would have been manageable. Combined, they sat outside major bank appetite and required specialist construction lender engagement.

Second, the developer's track record was strong but specifically residential. Mixed-use development carries different operational complexities (commercial leasing, hospitality fit-out coordination, mixed-use management) that lenders typically want to see direct operational evidence of. The developer's track record needed to be presented in a way that translated residential capability into mixed-use credit narrative.

Third, the project timeline was constrained. The developer had a 12-week window to either secure construction finance or release the site. The conventional lender engagement timeline (14-16 weeks across application, due diligence, term sheet negotiation, and credit committee approval) would have missed the window.

Before approaching any lender, we structured the facility architecture in detail. The structure had three core components.

Construction senior debt of $14.2Mstructured through a specialist non-bank construction lender with mixed-use appetite. The lender we selected had a track record in emerging precinct projects and was actively expanding into the Brisbane market. Their presales requirement was 50% rather than the 80% major bank threshold, significantly closer to the project's commercial reality.

Extended drawdown structurealigned to the project's construction phasing. Drawdowns were structured monthly across the 14-month construction period, with progress-payment-based release rather than the more restrictive milestone-based release that some specialist lenders default to.

Integrated end-debt provision for unsold residential stock at construction completion. Rather than structuring construction debt with a hard repayment date at practical completion, we negotiated a built-in 6-month roll into end-debt at predetermined pricing. This allowed the developer flexibility on sales tail timing without renegotiation pressure at completion.

Equity contribution structured at 22%of project cost. We negotiated below the lender's standard 25% threshold based on the project's structural strengths and the developer's track record presentation.

The facility was structured and approved in 8 weeks, well inside the developer's 12-week window. Construction commenced on schedule.

The project completed on time and within budget. Practical completion occurred in month 14 as planned, with residential presales achieved during construction at 58% by completion, comfortably above the lender's 50% threshold.

Final residential sales settled within 4 months of practical completion, allowing the integrated end-debt roll to extend the construction facility for 4 months at predetermined pricing rather than requiring refinance.

Commercial tenancies leased at completion to local operators identified during the construction phase, contributing to the project's overall yield profile.

The developer has since engaged Colossal Gold on the next project in the same precinct, a larger residential-led mixed-use development, expected to commence construction in late 2026.