United Trust Bank’s (UTB) Structured Property Finance team was approached to provide a £4.3m net facility to refinance the borrower’s existing debt and release a further £1m of equity.
The borrower is a long-established business which has been trading from the same South West London site for over 60 years. The business obtained planning consent in 2019 to extend the business premises and develop nine new apartments above and behind the existing building. The site was valued at £10m with this planning consent in place and additional comfort could be taken from the site’s substantial commercial value.
Having consulted with an experienced developer acting as a planning and promotional partner, the borrower wished to submit a more ambitious plan and the equity being released would give them working capital to pursue a new scheme to create 60 new apartments over eight storeys whilst retaining the ground floor commercial space. Pre-application discussions had been positive and if successful, the new scheme is expected to have a GDV of £60m.
Although the site was a trading commercial asset, UTB’s SPF team was happy to look at the planning angle and provide an 18-month facility with rolled interest so that it didn’t impact the cashflow of the underlying business. The intended exit is a sale to a forward funder/operator most likely in the later living sector.
|Borrower||Trading commercial enterprise|
|Loan Type||Planning gain facility|
|Loan Purpose||• Refinance of existing debt and release of equity to work up ambitious planning application|
|Special Features||• Security is a trading commercial property|
• Fees and interest rolled up for the 18-month term
• Inter-creditor deed required in respect of an additional lender providing a chattel mortgage for trading assets