FRP has arranged a £47.2 million refinancing and development facility for the refurbishment of a 58,000 sq ft office building in the City of London.
The specialist debt fund facility will repay an existing acquisition bridge and finance a capital expenditure programme that includes a full internal refurbishment and the addition of a new top floor.
Planning consent for the additional floor was secured following the client’s original acquisition of the building. The refurbishment is targeting a BREEAM Excellent rating.
The funding has been agreed at 78% loan-to-cost (LTC) and 65% loan-to-gross-development-value (LTGDV), with the margin due to reduce once the property is fully let.
FIVE-WEEK REFINANCE
FRP had also arranged the acquisition bridge being refinanced by the new facility. The latest transaction is the advisory firm’s third deal with the same client.
The refinance tranche was drawn five weeks after credit approval, while elements of the development funding will follow. FRP said the incoming lender adopted a flexible approach to the development tranche to enable the refinancing to proceed within the required timetable.
Edward Horn-Smith, partner at FRP, and Philip Kay, director at FRP, led the transaction, working directly with the principal at the specialist lender.
Kay (pictured) says: “This is a client we know well, and the brief was clear: refinance at pace and fund the capex without losing momentum. We partnered with a provider which took a commercial approach to the more complex points, particularly relating to the top floor addition, and having a direct line to the principal made a real difference.
“The credit process and certainty of execution were significantly quicker than the other routes available — which is exactly what this client and this timeline needed.”
Following completion of the works, the developer’s preferred strategy is either an owner-occupier sale or a letting to a single tenant, with a multi-let approach available as an alternative. Marketing for occupiers is expected to begin once work starts on site.
