2 new deals demonstrate lender appetite to support commercial development

07 June 2021

Peritus Corporate Finance are pleased to announce the completion of 2 new deals which demonstrate lender appetite to support commercial development and let up strategies on the right assets:

 

Transaction 1

Working on behalf of a private family office the team arranged a £17.75m 5-year term investment facility from an Insurance backed lender to refinance out a £14m development facility. The facility is secured against a mixed use 24 unit residential and 21,000 sq ft speculative office development in Southwark, London which reached PC at the end of Q3 2020.  

Steve Oliver at PCF commented. “This financing was challenging as the residential units let up within 3 weeks of Practical Completion, however the office launch was delayed due to Covid. We were delighted to work with the lender who took time to understand the underlying quality of the asset and provide a facility which can support the let-up strategy and long-term hold for the customer who has owned the property for over 30 years.”  

 

Transaction 2

We are also pleased to confirm the arrangement of a £60m senior debt development facility on behalf of Aver Property.

The facility is being provided by Bentall Green Oak (BGO) and will be used to fund the development of logistics warehouse units totalling c.1,100,000 sq ft and with a Gross Development Value in excess of £100m across 4 sites in Oldham, Sheffield, Fradley and Middlewich on a speculative basis. 

The facility helps Aver Property – a joint venture between ERGO Real Estate and NFU Mutual – drive forward their strategy into this sector and follows on from successful developments in Bicester and Markham Vale.

David Shaw from PCF commented: “We were delighted to assist with this financing and strengthen a longstanding relationship with the borrower which goes back over 20 years. There were a number of challenges to overcome not least being the speculative nature of the developments and while  we were able to identify interest in providing finance from a number of parties BGO were able to demonstrate track record and appetite to support a programmatic business plan and provide a facility which we hope can expand over time”.

Martin Jepson, founding partner of Ergo RE, says: “We approached Peritus with a view to them delivering a solution to our funding needs. The team worked closely with us to understand the transaction and build a list of potential lending counterparties who could deliver funding for our development strategy, from sourcing appropriate lenders through to assisting in negotiating term sheets and facility documents.”

 

Summary

These transactions show that there is still a strong funding market in place for good assets in strong locations. Peritus was delighted to be appointed on both transactions and to deliver solutions based around the client’s business plan, sourcing and project managing the transactions from inception to completion.

Peritus continues to work on a number of transactions and has £50m of transactions due to complete in June 2021.