Large Bridging Loan for Grade II Listed Building

• Property: Grade II Listed building of more than 200,000 sq ft
• Site: Approximately 30 acres
• Acquired: 2020
• Proposed use: Mixed-use redevelopment including a technology hub and incubation space
• Finance: Two-year bridging facility
• Interest rate: 6.5% per annum
• Exit strategy: Property sale following enhancement of planning consents

Large bridging facilities can provide a flexible source of short-term finance for complex property projects, particularly where the underlying asset has significant development or planning potential. Enness was approached by a client seeking substantial bridging finance against a Grade II Listed building of architectural and historic interest.

Purchased in 2020, the imposing property comprises more than 200,000 sq ft of accommodation set within approximately 30 acres. The site offered significant potential for alternative uses, with plans being considered to secure enhanced planning consent for a mixed-use scheme.

The proposed plans included a technology hub and incubation space, alongside the potential for residential accommodation, a hotel, retail and restaurants. Data centre facilities were also being considered as part of the wider vision for the site.

The client required a two-year facility to support the progression of this project alongside other property interests. The proposed exit strategy was the sale of the property once the planning position had been enhanced, with the anticipated sale proceeds being used to repay the bridging facility.

The nature of the property and the proposed planning strategy meant that a conventional mortgage was unlikely to provide the flexibility required. The transaction required a lender prepared to consider the property's existing characteristics, its potential future uses and the proposed planning-led exit.

Enness identified a well-established peer-to-peer lender that was prepared to support the project. The lender was attracted to the potential wider benefits of the proposed redevelopment and was willing to consider a bespoke two-year bridging structure.

The resulting facility was arranged at 6.5% per annum for two years. The structure provided the client with additional time to progress the planning strategy and work towards enhancing the property's value and future marketability.

The proposed redevelopment aimed to create a sustainable future for the site by unlocking the value of its military heritage while broadening its appeal as a strategic location for inward investment. The plans also contemplated opportunities for local people and organisations to play an active role in the future stewardship of the landscape and heritage.

The case demonstrates how large bridging loans can be used where a property has significant underlying potential but requires time to progress planning, development or a future sale. For complex commercial and mixed-use assets, the ability to present the full project strategy and proposed exit can be an important part of identifying suitable specialist finance.

Enness works with specialist lenders on substantial property transactions, including bridging facilities for complex commercial and development projects. The appropriate funding structure will depend on the property, proposed use, planning position, available security, borrower circumstances and the lender’s criteria.

Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax or investment advice. Finance is subject to status, underwriting, valuation, property suitability, due diligence, planning considerations and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances. Planning, development and tax matters should be considered with appropriately qualified professional advisers.

Risk Warning:
Property securing finance may be repossessed if repayments are not maintained. Bridging finance is short-term borrowing and can carry higher costs than longer-term finance. Development and planning-led projects involve significant risks, including planning delays or refusal, changes in property values, development costs, market conditions and the ability to realise the anticipated value of the property. Borrowers should ensure that a realistic and achievable exit strategy is in place.