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GLOSSARYTERMS AS A CREDIT DESK USES THEM

Loan to gross development value (LTGDV)

What is loan to gross development value (LTGDV) in development finance?

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BY MICHAEL SHANG · SIXTEEN YEARS IN COMMERCIAL BANKING · UPDATED

// THE SHORT ANSWER

Loan to gross development value is a development loan measured against the valuer's estimate of what the finished scheme will sell for, its gross development value. It is the usual headline limit in UK development lending; in Australia and New Zealand the same test is often run against gross realisation value (GRV), which Australian lenders commonly take net of GST. It is usually measured on the whole facility, including the interest and fees that will be added to it, not on the first advance. A loan of US$14m against a GDV of US$20m is 70%, and a 10% fall in values takes it to about 78%.

BASIS  Practitioner judgment from sixteen years in commercial banking, set out in How Bankers Think (Highbank Press, 2026). Every borrower on this site is a composite constructed for teaching, not a client. The market is mid-market commercial lending as practised in New Zealand and Australia; where a convention differs elsewhere, the page says so.

// WHAT IT IS NOT

On-completion value is the valuer's figure for the finished project; LTGDV is the ratio of the whole facility, interest included, to that figure. Loan to cost measures the same loan against what the project costs to build.

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PROPERTY AND DEVELOPMENT

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