Remortgage of £11million asset from development to commercial finance
12th June 2018
Refinancing from development finance is an important step for property investors when it comes to managing cash flow and expenses.
Enness arranges property finance across a range of areas, whether that’s financing a holiday home in Spain, buy-to-let property in Monaco, or a residential property in London. Our development and commercial teams can also assist with commercial investors. As such, we often receive cross-referrals; one of my most recent cases was referred from the Enness International team, as they had been working on remortgaging my client’s French property.
My client was a property investor and developer, who had recently completed development and was therefore looking at remortgaging from development finance onto regular term finance. Development finance is expensive in comparison to standard term finance, and my client was in a good position to refinance from development finance, as they had a commercial lease agreed with a large call centre firm.
The development, located in southwest England, was valued at £11million. The difficulty with this case was that my client was particularly price-sensitive and wanted a lender who would allow a second charge from a wealth management group working behind my client. The location of the asset was also slightly unusual, as it was not in what is usually considered a prime commercial spot.
OUR SOLUTION
Fortunately, having placed deals of this nature across the market on many occasions, I was able to locate a lender who was willing to work with the client at a very competitive rate—perhaps the most competitive rate I have seen on a commercial investment of this nature.
This lender had a large appetite to work with this client and was happy to fund a large deal in a ‘secondary’ location. This lender offered a 5-year term on a facility of £5million, at a rate of just 2.49%. This was an excellent example of how important refinancing from development finance is: if you have recently completed development and are looking to refinance, I would be happy to advise you further.
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