InterBay has completed a £17.5m interest-only remortgage on a newly developed residential scheme in the South East, highlighting continued demand for complex structured exits.
The specialist property lender worked alongside SPF Private Clients to deliver the facility, which is secured against a 103-unit private rented development arranged across three purpose-built buildings.
The scheme comprises a mix of one, two and three-bedroom apartments, alongside underground parking and secure cycle storage. The borrowers, experienced developers, are retaining the asset as part of a long-term rental strategy.
The transaction was structured to facilitate a transition from development finance, requiring close coordination between origination, underwriting and completions teams.
InterBay’s specialist property solutions team carried out valuation reviews and stress tested multiple exit scenarios, while also securing support for a non-panel new homes warranty provider.
A deferred charge over the freehold was structured to enable separate completions across the blocks, supporting a phased transition away from the development lender. Bespoke interest cover ratio calculations were also undertaken to support a policy exception aligned to the scheme’s operational cost profile.
The deal reflects the ongoing role of structured term debt in providing an exit from development funding, particularly for sponsors looking to stabilise assets within the private rented sector.
Rental demand in the area is being underpinned by the recent opening of a new NHS hospital and a university campus adjacent to the site, which are expected to support employment growth and tenant demand.
Marc Callaghan, head of commercial mortgages at InterBay, says: “This transaction demonstrates InterBay’s ability to structure large, complex residential investment deals with speed, confidence and a deep understanding of the PRS market.
“Our InterBay team and Russell Hall at SPF Private Clients worked closely to manage the case from each side, overseeing the deal from start to finish and crafted a solution to match the client’s needs.”
Russell Hall, executive director at SPF Private Clients, adds: “InterBay were the ideal partner for this transaction. The scale and complexity of the development required a lender that understood the asset and could move with confidence throughout the process, InterBay delivered on both.
“Their ability to structure a solution aligned with the client’s long term rental strategy was invaluable and this deal shows why InterBay remains a go-to lender for experienced developers seeking certainty, expertise and a collaborative approach.”
