Location : Central London

Loan Type : Commercial Mortgage (3x properties)

Loan Size : £ 24.3m

Loan-to-Value : 60%

The Situation

Our client had recently developed two residential apartment blocks worth approximately £37m and the development finance needed to be repaid. The client also owned another unencumbered commercial property that they wished to add to the security, to release more equity.

The Challenge

The two recently developed properties, were not yet occupied and therefore any rental covenants would not have been met. We were also releasing more than £ 10m of equity to the client.

The Outcome

A margin of 2% + 3 month Libor, for 6 years, with no exit penalties at any time, plus rental covenants suspended for the first 12 months. The clients plan was still not certain, so the incredibly low rate meant he had time to consider his options, but if he wanted to sell some of the apartments he was free to do so at any time.

The equity release of more than £ 10m meant the client was able to proceed with his next development project, and avoided having to take more expensive development finance.