Structured London Property Finance Rescue From Development Loan Due To Expire

Area
East London
Capital Raised
£21.5M

The Scenario

This developer was coming to the end of an ambitious project to develop a large Victorian warehouse site in East London, creating a six-storey building with 25,000 sq ft of office space and 31 apartments.

They had invested a quarter of a million pounds of their own finance in drawing up plans and developing their planning application.

Planning permission was granted after two years, allowing building works to commence, incorporating high-spec finishes including exposed brickwork, polished concrete, and contemporary kitchens and bathrooms.

Now the developers’ £19.2M loan was due to expire, putting them onto their lender’s punitive default rate. They needed an additional £1M to complete the development, and an additional £1.3M for interest, charges, professional fees and disbursements.

The challenges: most lenders are wary of partially completed projects. And few will consider part-finished commercial developments or residential schemes at more than £1,000 per square foot. In addition, the proposed exit for this development was a combination of sales and letting income.

The apartments were priced from £500,000 for studios to nearly £1.5M for the three-bedroom penthouses. Sales were agreed for nine of the apartments, with another four reserved.

The company intended to retain the most attractive penthouse apartments, and the commercial space, for investment. Including the freehold, the combined GDV was around £37M.

The Solution

The structured finance team from the specialist lender who was approached made several visits to the site and met key members of the development team. They were satisfied that the work completed was of a high enough standard to command the premium prices that were expected.

They agreed to provide the required structured property finance at a rate significantly below the current cost of lending. The rate would be reduced on practical completion, and again post-sales, when the clients would also be able to recoup their own capital investment.

Mathew Phillips

Finance Broker

Bristol

0117 959 5094

Are you in a similar situation? I specialise in bridging finance at Clifton Private Finance - I will find you the best funding solution for your property transaction.

Alex Chambers

Senior Finance Broker

Bristol

0117 403 4324

Are you in a similar situation? I am a specialist in residential and investment property finance for UK and international clients at Clifton Private Finance. Please don't hesitate to get in touch for a no-cost discussion of the finance you need.

Luther Yeates

Finance Broker

Bristol

0117 244 5561

Are you looking for a similar type of property finance? I have extensive experience finding residential and investment property finance for UK and international clients. Please get in touch and we can arrange to discuss your situation at any time that's convenient for you.

James Palmer

Senior Associate

London

0203 900 4322

Are you looking for similar property finance? I specialise in development and commercial finance for Clifton - I can find creative and commercially effective solutions for your project.

Sam ONeill

Senior Finance Broker

Bristol

0117 959 5094

Is your situation similar? I am a bridging finance specialist at Clifton. I can find a quick, cost-effective solution for the funding you're looking for.

Robert Gibb

Senior Finance Broker

Bristol

0117 959 5094

Are you looking for mortgage or short-term finance for residential or buy-to-let property (including HMOs)? I have extensive experience in finding property finance solutions for UK and international clients, both as individuals and limited companies. Please give me a call and let me see what I can do for you.

Adam Arnott

Associate Director

Bristol

0117 205 0214

Is your situation similar to this? I have extensive experience of advising clients who need creative property finance solutions. Please get in touch and we can arrange a time that suits you for a detailed discussion of your requirements.

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