Acquisition value
£14 million
LTV sought
60%
WAULT to expiry
9.5 years
Finance was required to purchase a retail park in regional UK.
The retail warehouse scheme was approximately 80,000 sq ft with 9 tenants.
The deal
Assets
- Secondary retail asset
- Regional UK
- 9 retail units
Security
- First legal charge
Income
- From rental of all properties
Requirements
- £8 million + acquisition finance
Challenges
- Structured offshore
- Middle Eastern family
- Low WAULT to break
Facility Secured
- 5 year term
- 60% LTV
- Interest only or soft amortisation
Summary
A modern, newly developed retail warehouse scheme which extended to approximately 80,000 sq ft at ground floor level was available for full first legal charge. Strong retail tenants were in place, with a WAULT to expiry of 9.5 years, but only circa 5 years to WAULT break.
The client had offers from two existing bank relationships but sought a whole of market comparison. They were specifically considering interest only repayment vs. soft amortisation and how each option would impact the cash-on-cash yield and IRR.
Funding options sourced increased cash-on-cash yield from 8.7% to 9.4% and IRR from 6.2% to 7.3%