DFT recently interviewed Rishi Passi, CEO of development lender Oblix Capital, to find out how he graduated from global property developing to development finance lending.

Rishi, a developer with over 14 years’ experience, launched London-based lender Oblix Capital in 2014 after recognising a gap in the market for alternative finance.
 
As a developer, he had found it strange that borrowing below £5m from the high street banks, involved more scrutiny of his supporting assets, than of the details of the purchase itself.

When asked how his experience as a developer had helped him as a lender, Rishi said his familiarity and understanding of a wide range of market issues meant he was “better equipped to handle issues developers come across, especially for new developers”.
 
“The more experience you have within the field, the better,” he added. “From the macro to the micro there are all manner of roadblocks that can derail a development. Being able to predict what these might be when structuring the initial development loan can be a major boon for everyone involved.”
 
Rishi says his favourite case as a developer involved a block of residential flats in Jacksonville, Florida. At the time his firm was headquartered in the UK and he therefore needed to find a US-based asset manager and project manager whom he could trust. One New York bank, which was expecting the market to fall further, even told him that he “was mad”. But, Rishi prevailed, the site was bought, redeveloped and sold on to an institutional investor within nine months.
 
As a lender, Rishi’s favourite case was a “fairly unique” loan for a former post office building. It was situated between two universities and was being developed from a state of disrepair into 52 student flats, using the existing infrastructure of the building with two additional and modern stories above. Rishi said the developers were very experienced and they impressed him by putting in a lot of equity, leaving no stone unturned to provision for bed linen, cutlery, white goods and wall mounted pictures in the loan application. The site has been developed as residential accommodation C3 which also provides scope to generate rental income from the private sector too, and has been met with wide support from local businesses and the council, who welcome both the additional housing and footfall to the area.
 
“We bring in a bank-style structure of underwriting, but with the speed and flexibility of an alternative lender,” Rishi explained.
 
When asked how he thinks the development finance industry has changed since his entrance in early 2014, he stated that more lenders are slowly starting to enter the space.
 
Rishi told DFT that developers face more choices now, adding: “There are so many products out there.”
 
“The number of new entrants can only be a good thing for increasing competition, and ensuring that the very best finance is provided to developers in the UK. As in any industry, this competition will create some shake down in due course – that’s what markets do – but strong new propositions will emerge that serve the market better on the whole” Rishi concluded.
 
Last month, Oblix Capital appointed ex-Bridgebank head of sales Steve Woods to lead the bridging and development lender’s regional team.