Pallas Capital has completed a £3.9m development loan to refinance the first phase of a residential project near Market Drayton and finance its next stage of construction.
The 16-month facility has been agreed at 65.5% loan-to-gross-development-value and will support a scheme comprising eight homes once the second phase is completed.
The developer, an experienced contractor with a track record of residential projects in the area, had already completed the first phase before seeking finance for the remainder of the development.
Pallas Capital was introduced to the transaction by a broker and completed the facility about four weeks after terms were agreed.
ADDITIONAL SECURITY
The lender revised the structure following receipt of the valuation, bringing the borrower’s existing residential portfolio in Stone, Staffordshire, into the deal as additional security.
It also amended solicitor and valuation instructions and managed the transfer from the developer’s previous lender. The existing facility had run beyond its term, creating a risk of penalty charges.
The transaction was led by Mark Witherington, senior originator at Pallas Capital. The lender also had an existing relationship with some of the professional team involved in the project, including a monitoring surveyor who had previously worked with the borrower.
Witherington (pictured) says: “This deal is a good example of what we try to bring to every transaction: staying close to the borrower and working out a structure that fits, rather than defaulting to no when something doesn’t tick the standard box.
“It’s the kind of hands-on underwriting that development finance tends to need, and it’s a big part of how we’ve built our reputation with brokers and developers since launching.
“We’re pleased to have got the development moving into its next phase, and we look forward to continuing to support the borrower as the scheme comes to market.
“It’s exactly the kind of relationship we want to build more of as we grow our presence in regional development finance.”
Homes from the completed first phase are being brought to market for sale while construction progresses on the remainder of the scheme.
