Development finance specialist Davon Ltd has assisted the refurbishment of two Victorian villas into 14 apartments with views over the Bristol Channel…
Case study fact file:
• Facility: £530,000
• Costs: 1% arrangement fee, interest at 30% pa rolled up
• Area: Clevedon
• Development: 14 apartments
The developer required a mezzanine facility on top of a senior debt which was already agreed with a senior debt lender in order to refurbish two Victorian villas and construct a new-build block to connect them.
The new build block is set to create 14 apartments that will overlook the Bristol Channel.
Davon is the funding adviser to Strata which provides mezzanine tranches to experienced developers in the South of the UK, where a mezzanine facility of £530,000 was provided by Strata to allow the developer to substantially reduce the equity required for the scheme and enhance their return on capital instead.
The funding structure also provided liquidity for further acquisitions.
The facility was provided on Strata terms with a 1% arrangement fee, 30% pa rolled up (but not compounded) and no exit fee.
“The facility provided substantially reduced the sum of equity that would have been required by developer in order to develop the site using only the standard senior debt,” Davon Ltd commented.
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