For developers, the ability to source the correct funding structure can be the difference between success and failure. Rate and cost are certainly important factors. However, a ‘cheap’ lender that provide zero flexibility can be quite a costly option further down the line when issues arise on development projects. Planning and construction absolutely come with so many risks attached so partnering with the right finance provider is a key factor.
The P10 Commercial team is experienced at helping property developers to find the right funding solutions for property developers that operate in the luxury space.
In this particular situation, we were approached to arrange funding for an extremely high value, single unit on the prestigious Wentworth Estate in Surrey.
There are always issues to overcome on funding development sites, but the main thing that was making this deal slightly more complex than it should have been was due to the fact the capital value on this development were extremely high and it was a single unit being funded. A lot of lenders in the market stay clear of high value developments, which means there is a greater level of diligence needed from the adviser when advising our client what route to take.
P10 Commercial have delivered numerous high end developments and are extremely well versed in delivering the absolute best lending solutions in the market for these niche deals. In this instance we was able to deliver the following structure for our delighted client.
The solution we delivered was as follows.
GDV - £6,000,000
Net Development Loan - £3,200,000
Loan to GDV – 60%
Margin – 5% over SONIA
Exit – Sale Of Property
This solution delivered on all objections for our client:
✔ Allowed our client to release £700,000 so they could make further acquisitions day 1
✔ Delivers an extremely competitive margin compared to the market
✔ Delivered a 55% return on capital
Do you need advice on how best to fund high value development projects? Are you looking for land opportunities for future development sites? Our commercial team have years of experience and a growing network of landowners and lenders. Get in touch to find out about future opportunities and to discuss your funding requirements. We would love to work with you.
In the high-stakes world of property development, securing the right funding can be the thin line between dazzling success and disheartening failure. While interest rates and costs are certainly pivotal, opting for a 'cheap' lender devoid of flexibility can backfire dramatically when unforeseen issues inevitably surface. The realms of planning and construction are fraught with risks, making the selection of an adept finance partner crucial.
At P10 Commercial, our seasoned team excels in guiding property developers through the intricate landscape of financing, especially within the luxury property market. Recently, we were tasked with securing funding for a single, highly valuable unit within the illustrious Wentworth Estate in Surrey.
Development financing invariably comes with its challenges, but this project posed unique complexities. The high capital value of this singular development unit meant many lenders shied away, necessitating an exceptional level of diligence from our advisors. With a wealth of experience in delivering premium developments, P10 Commercial was poised to navigate these complexities and secure the optimal lending solution.
Our tailored solution for this prestigious project included:
Gross Development Value (GDV): £6,000,000
Net Development Loan: £3,200,000
Loan to GDV Ratio: 60%
Margin: 5% over SONIA
Exit Strategy: Sale of the Property
This carefully structured plan met all our client's objectives:
Immediate Capital Release: Enabled our client to access £700,000 for further acquisitions from day one.
Competitive Margin: Secured a market-leading margin.
Capital Return: Achieved a 55% return on capital.
Are you seeking expert advice on funding high-value development projects? Looking to explore land opportunities for future ventures? Our commercial team boasts years of experience and a robust network of landowners and lenders. Connect with us to explore future opportunities and discuss your funding needs. We are eager to collaborate and bring your vision to life.
