We helped an experienced property developer after they encountered significant hurdles developing a 170-apartment build-to-rent (BTR) scheme in the East Midlands.
After the government pension fund abruptly withdrew following a budget announcement, the property developer was left in an awkward situation needing to raise finance to continue their property project.
Seeking assistance, the developer approached us to secure financing and support. Our property team quickly assessed the situation and connected the developer with a substantial equity partner interested in the project. Through comprehensive credit reports and discussions, the equity partner devised a plan to secure the required senior debt of £25 million, equivalent to 65% of the Gross Development Value (GDV).
As the developer had limited available cash, we also assisted in approaching a Challenger bank to release equity from an existing asset through a second charge basis, generating £2 million in cash for the project. We also connected the developer to unsecured funders specialising in property investment businesses. This enabled additional working capital to support the ongoing project.
We also played a crucial role in managing the developer’s relationship with the vendor and their bank, successfully securing an extension of the land purchase deadline and negotiating a £500,000 reduction in the land’s purchase price, improving the project’s financial feasibility.
Finally, we managed to arrange a 36-month senior debt of £25 million to cover the construction and stabilization period under the Build to Rent (BTR) scheme. The property developer also secured funding of £5.5 million on a profit-sharing basis, with no upfront fees, over the same 36-month period.
Despite limited available cash, the developer met their 30% equity requirement of £8 million through a second charge against an existing asset, allowing them to participate in the project while preserving their financial resources.
The property developer was very happy with our assistance as they successfully navigated the challenges faced and secured the necessary financing to move forward with the BTR 170 apartments in the East Midlands.
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