United Trust Bank was approached to finance a new project for an existing customer involving the purchase and redevelopment of commercial premises. The client exchanged contracts for the purchase conditional upon the grant of planning consent for the demolition of the existing buildings and replacement with 8 x 4 bedroom townhouses and 8,000 square feet of commercial space.
Our clients, who have dealt with a number of similar schemes in the past, employed imaginative architects to create and present a design that would transform the existing ‘street scene’ from that of secondary commercial with some ‘scruffy’ residential, to a smart predominantly residential road blending in well with the period architecture and prestigious squares found in the adjacent streets and surrounding area.
Planning permission was approved in July 2013 and completion was delayed until January 2014 to allow sufficient time for the Section 106 to be finalised. In the meantime the professionals were instructed to commence the due diligence. The valuation was significantly stronger than expected.
The loan term is 18 months and construction will be undertaken under a JCT contract with a financially robust, third party, contractor.
Our initial loan against the land purchase stands at 55% and the exit LTV is 50%.
Loan of £9.1m – £18.2m GDV