Residential development lender offers additional $ 150 million
Record-breaking new home approvals and unprecedented construction activity in Auckland give Auckland’s largest non-bank lender the confidence to increase its available financing to an all-time high.
As many financial firms have to restrict new lending due to capital shortages, New Zealand Mortgages & Securities (NZMS) says its market position continues to strengthen.
Now, an additional injection of funding for the Auckland development community has been announced by James Kellow – Director of NZMS and Principal Financier of Auckland Real Estate Development.
“In the coming months, our loan portfolio will exceed $ 430 million. We have $ 280 million in existing commitments and an additional $ 150 million in new Auckland project money has become available, ”he said.
NZMS is part of the private Manson TCLM development and construction group. Mr. Kellow says that Mansons’ recent sales of commercial development properties, including 136 Fanshawe Street, allow the additional financing.
NZMS is now looking for experienced developers to work with. Over the years, the Ponsonby-based lender has funded the development of thousands of townhouses, residential sections, apartments and commercial developments in the Auckland area.
He now advises preferred developers that he can provide direct refinancing and equity release to support project costs, standard development funding, or settlement funding for future development sites.
“Thanks to our Mansons partnership, we can tap into a strong balance sheet, financing ourselves directly from our own cash reserves and committed bank lines. We can do this at a lower cost than any other New Zealand-based financier, and if we’re going to make a deal, we’ll just do it, ”Kellow said.
Its latest round of new loans will see NZMS focus directly on mid- and large-scale townhouse developments. The financier says he aims to continue funding at least 250 units under construction at all times.
“Townhouses work for Aucklanders – they are relatively cost effective to build, often on freehold title, and young families also love the outdoors. That’s why Auckland sees so many townhouses popping up, ”he says.
NZMS wishes to continue supporting quality but affordable developments in the existing urban areas that have been developed in the Auckland Unit Plan for further residential intensification.
Recently, the Real Estate Institute of New Zealand reported that the median house price in Auckland in July rose 28.0% in 12 months to a record high of $ 1,175,000.
“We like to support projects that lower the median house price in Auckland, not inflate it. Therefore, many developers we partner with sell townhouse products at a price of around $ 650,000 to $ 850,000. We’re really comfortable with it. This is what the region desperately needs and what young couples can afford.
“Mansons TCLM’s $ 150 million is intended to finance pre-sold townhouses, and we expect that money to be fully allocated by the end of the year,” he said.
With much of the area zoning much more permissive and Auckland’s council now more pleasant and efficient at issuing consents, Kellow says the risk to developers and lenders has decreased.
In fact, in some cases, NZMS has funded experienced developers 100% of the cost of their project, comforted by the fact that consumer demand remains so strong. He says it’s not unusual for 80% of townhouses to be sold within two weeks of getting consent.
“As the construction industry experiences supply issues and cost increases, demand for new housing remains incredibly strong. Then when the migration comes back we’ll see another boost. NZMS remains very confident in supporting the Auckland market, ”says James Kellow.
New Zealand Mortgages & Securities is a real estate finance specialist. They have helped provide nearly $ 2 billion in real estate development financing across Auckland.
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