Securing Early Tenancy to Kickstart a Development Project

For developers, securing finance to begin construction is often a challenge without early commitments from tenants or buyers. Banks typically require at least 50% of the project to be leased or sold off the plan before approving funding.

A regular client of Fred Dubois reached out to discuss how to move forward with his latest development project in Mackay. Before construction begins, what’s being sold is essentially ‘thin air’—just paper. This means it’s crucial to have attractive marketing materials and strong contract documentation in place, working closely with the developer’s solicitor.

Once the documentation was ready, Fred launched a campaign to find tenants off the plan. It wasn’t long before a tenant committed to Warehouse 1, representing 55% of the project. With this early commitment secured, the developer was able to obtain financing and start construction.

While the building was under construction, ongoing marketing efforts led to a tenant signing for Warehouse 2, bringing the project to 100% occupancy before completion.

Thanks to this approach, the developer secured finance under favourable terms and reduced many of the risks typically associated with real estate developments.