Mortgages for Business recently helped out an SPV limited company secure finance for the conversion of a redundant office building into a block of residential flats.
Funds for: Conversion of redundant office building into block of 18 flats
Total Loan Amount: £1.233 million
Build Costs: £1.008 million
GDV: Over £2 million estimated
An impression of the development by Zize Ltd Architects
A newly-formed Special Purpose Vehicle limited company owned by two directors had been set up for property development purposes.
One of the directors had spent many years as a project manager for a major construction company and the other is a successful local businessman who sold his company for a substantial sum and is investing in various diverse projects.
The two directors purchased a large redundant office block in Eastbourne for £300,000 in cash, in March 2013 after the previous owners were struggling to let the property.
Because of the Director’s previous experience and high-net-worth status, and because the building could be developed without having to adhere to any particular planning restrictions, Mortgages for Business found a lender who was happy to lend 60 per cent of the gross development value.
The project is due to be completed shortly, with the gross development value of the site anticipated to be in excess of £2 million.
Commenting on the deal, David Whittaker, Managing Director of Mortgages for Business, said: “We took the deal to Aldermore Bank and negotiated a loan of £1.233 million to cover 100 per cent of the build costs of £1.008 million, plus full interest roll up and a contribution to the land purchase.
“This minimised the borrower’s cash contribution and allowed them to look at another project simultaneously.”