White & Partners 10 month construction loan to a trust managed by a subsidiary of Blue Sky (ASX:BLA) for the development of the Duke Apartment Project in Brisbane was repaid on schedule in October 2017.
Representing White and Partner’s first senior lending deal, the loan facility was ~$37 million and had a 10 month term. Investors were returned a net cash multiple on committed funds of 1.09x money.
The Duke now sits as a 15 storey, 125 apartment complex in the inner-Brisbane suburb of Kangaroo Point. Despite highly publicised concerns on apartment settlement rates in Brisbane, the majority of buyers in the Duke were able to obtain finance and settle.
The Duke loan highlights the opportunity to provide attractive risk-adjusted first mortgage investment opportunities on high quality projects:
2018 will continue to be test for Brisbane, with over 14,000 apartments due for completion. Our Ray White data, which represents 14% of the market, show stability with both prices and sales volumes in 2017 in line with 2016 levels.