Loan value
£28 million
Term
2 + 5 years
GDV
£47m+
A 500+ bed student accommodation build required development and operational finance.
Research into comparables and in-depth financial modelling was vital
The deal
Assets
- Site with permission for 500+ bed student accommodation development
Security
- First legal charge
Income
- None proven – from rental upon completion
Requirements
- £28m million development finance at 65% LTC
- £26m operational finance at 55% LTC
Challenges
- New build and new business with no track record
- Conversion loan required
Facility Secured
- 2 year development term
- 5 year operational term
Summary
A property company, was seeking finance to develop a 500+ bed purpose-built student accommodation block in regional UK. The client intended to hold the asset for operation post development, so was seeking a lender who would provide development finance initially, converting to an investment loan on completion of the works.
The quantum sought was £28m with interest roll-up required for the two year development period (at 65% LTC). Upon completion of the GAV £47m+ accommodation development, they then would require £26m for a five year term at 55% LTV. The preference was a single lender to provide cost savings and longer term security for the newly operating business.