A newly established property company approached Enness Global seeking finance to acquire a block of student accommodation in Leicester valued at approximately £3.5 million. The company required around £1.5 million of borrowing to support the acquisition and was looking for a lender comfortable with a relatively complex corporate and ownership structure.
The proposed acquisition formed part of the company’s wider strategy to build a portfolio of student accommodation. However, the transaction presented several challenges from a lending perspective. The company had a tiered structure involving multiple entities and investors, while the borrowing vehicle was established across more than one jurisdiction. The directors were also relatively new to student accommodation investment, meaning the lender required a clear understanding of the company’s structure, ownership arrangements and investment strategy.
The complexity of the corporate structure meant that simply presenting the application through a conventional lending process was unlikely to provide sufficient context. Enness therefore worked closely with the client and their professional advisers to prepare the case and explain the purpose of the different entities and investment arrangements.
Enness introduced the clients to a lender experienced in assessing complex commercial property transactions. A meeting was arranged between the lender, the clients and their professional advisers, allowing the structure to be reviewed in detail and giving the lender an opportunity to understand the rationale behind the various entities and equity arrangements.
The structure was ultimately viewed as a mechanism for allowing different investors to participate in individual acquisitions and support the company’s broader portfolio strategy. With the ownership arrangements and investment rationale clearly explained, the lender was comfortable proceeding with the proposed acquisition, subject to its usual underwriting and due diligence.
Enness secured approximately £1.5 million of commercial property finance against the acquisition, subject to lender criteria. The facility was structured over a five-year term, providing the company with the funding required to proceed with the purchase while establishing a longer-term financing arrangement for the asset.
This case demonstrates the importance of clear structuring and communication when arranging finance for companies with multi-entity, multi-jurisdictional or investor-led ownership structures. Where conventional lending processes may struggle to capture the full picture, specialist lender selection and careful presentation of the underlying proposition can help create a clearer path to funding.
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, property suitability and lender criteria. Terms, rates and availability may vary depending on individual circumstances.
Risk Warning:
Commercial property values can fall as well as rise. Where borrowing is secured against property, failure to meet repayment obligations may result in repossession. Property investment and development also carry risks, including changes in market conditions, costs and rental demand.
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.
