Source: The Urban Developer
Date: 3 July, 2024
Leading Real Estate Private Credit manager, Zagga, will provide a senior loan facility to boutique developer RNB Group for the construction of an ultra-luxury residential complex overlooking Sydney’s Rose Bay.
The Vue le Pont development is a multi-level building designed to the highest standard, with views of Sydney Harbour, the bridge, and the city. The Project will consist of two full floor three-bedroom, 3.5-bathroom and two four-bedroom, 4.5-bathroom full floor apartments over basement parking. It is expected to garner appeal from locals, expats, and high-net-worth international buyers, who are looking for ‘lock-up & leave’ right-sized product situated within the local neighbourhood.
Tom Cranfield, Zagga Director, Investment & Risk said the deal was an attractive one for the firm.
‘We are pleased to be providing funding for an acclaimed developer who has engaged an award-winning design and construction team of MHN Design Union and Fleek Constructions. The development is in a tightly held location, and its enviable position and small number of units is set to create strong buyer demand’.
Mr Cranfield said the sponsor has a strong track record in comparable projects.
‘RNB Property Group has successfully delivered several ultra-luxurious developments throughout the eastern suburbs of Sydney. Their depth of experience and continued success has provided them with a deep understanding of what buyers expect in terms of design requirements, amenity, finishes, sizing and location.’
At an attractive loan-to-value ratio, and providing a first mortgage as security, Mr Cranfield said that senior loan transactions, such as this, are popular with the firm’s investors.
‘Our investors want opportunities that deliver strong risk-adjusted returns. This is why it is important for us to work with sponsors who have a strong track record, on projects that have been set up for success in terms of location, design and amenity. The Rose Bay Vue de Pont development meets all our criteria, and we are pleased to be partnering with RNB Property Group on it.’
Ronnie Shulkin, RNB Property Group, said there is a deep market in Sydney, and particularly the Eastern suburbs, for this type of project.
‘Having spent over 20 years developing luxury projects in this area, we know there is unmet demand from discerning buyers looking to ‘right-size’, but they often come up against low supply of suitable properties. When a site like this becomes available, we know that with the right design, buyers will respond quickly.’
Mr Shulkin said that selecting the right funder is key to project success.
‘We are pleased to be working with a funding partner with such a strong commercial approach. Zagga understands the fundamentals of our project and has provided efficient access to capital that will get construction moving rapidly, thereby maximising our return on investment. We see the value in working with a private credit provider who can move more nimbly than traditional bank sources. We look forward to seeing this exciting, luxury project come to life.’
