- Property: 22-bed care home on 4 acres of land, UK
- Property value: £4.5M
- Loan amount: £3M
Enness was approached by a client seeking finance to acquire an unused 22-bed care home set across approximately four acres of land. The property was valued at £4.5M and had previously closed after the group that owned it experienced financial difficulties elsewhere in its business.
The opportunity presented several potential uses for the site. With the local authority facing significant demand for housing, the property had been identified in the local plan for a potential change of use to residential. At the same time, the client recognised the ongoing need for specialist care in the area and had an operator prepared to lease the property following refurbishment and extension.
The client therefore proposed a scheme that could support both objectives. Alongside the continued use of the care home, part of the four-acre site was being considered for residential development, subject to the necessary planning consents.
This combination of an existing specialist use, refurbishment requirements and potential future development made the financing more complex than a straightforward commercial property acquisition. The proposed plans and the different potential uses of the site also meant that lender appetite needed to be carefully considered.
Enness worked with the client to identify a suitable funding structure and secured £3M of finance against the £4.5M property. The transaction required patience and coordination as the various elements of the proposal were worked through, but the funding provided a platform from which the client could progress with the acquisition and wider plans for the site.
Care homes and other specialist commercial properties can require a more tailored approach to finance, particularly where refurbishment, operational changes or potential planning opportunities form part of the wider investment strategy. Lenders will consider the property, proposed use, borrower experience, income and development plans when assessing an application.
Enness works with specialist providers across the commercial property finance market, helping borrowers structure finance around more complex property acquisitions and investment requirements. The appropriate funding solution will depend on the individual circumstances of the borrower, property and lender criteria.
Disclaimer:
This case study is for illustrative purposes only and does not constitute financial, legal, tax, planning or investment advice. Finance is subject to status, underwriting, valuation, due diligence, planning considerations and lender criteria. Terms, rates, LTVs, fees and availability may vary depending on individual circumstances. The terms referenced relate to a historical case and are not indicative of current or future pricing.
Risk Warning:
Commercial property and development finance carries risks. Property values can fall, planning permission may not be obtained and projected development or rental income may not materialise. Failure to meet finance obligations could result in the loss of secured property. Borrowers should obtain appropriate independent professional advice before proceeding.
Information contained in our case studies is for market and illustrative purposes only. In some cases, these may be made up of multiple cases and are for illustrative purposes only.
Some case studies are made up of enquiries that have come into the business, not all business completes, and the posting of a case study does not represent a completed piece of business.
Property values can fall as well as rise, and you may not get back the amount originally invested. Property investments can be illiquid and may take time to sell. Where borrowing is used, your property may be repossessed if you do not keep up repayments on a mortgage or other loan secured against it.
