United Trust Bank (UTB) has completed a £35.5m bridge-to-investment facility with Dominus New Homes secured against a new £51.1m GDV mixed-use build-to-rent (BTR) development in South West London.
The five-year facility, which was structured at 70% LTV, enabled Dominus to refinance its existing development loan and release equity from the scheme as it approached practical completion.
The bespoke facility includes a reduction in the lending margin once rental income has stabilised and an agreed interest cover ratio has been achieved.
The development, known as Wandle Place, comprises 96 BTR apartments and approximately 9,000 sq.ft. of commercial space in Earlsfield. Tenancies have been agreed on nearly half of the apartments within seven weeks of marketing.
Chris Mason, director of Dominus New Homes, said: “Our business model has always been to build for sale, but current poor demand to buy new flats in London required a rental approach this time, together with an investment loan to repay our development finance on time. After all the hard work involved in bringing a development of this scale to completion, it’s particularly rewarding to see such a quick and positive response from prospective tenants.
“With UTB’s funding in place, we can concentrate on getting the remaining apartments let, welcoming our first residents and making this a development people will be delighted to call home.”
Stan Lersch, founder of Property Finance Services, which acted for Dominus, added: “Dominus New Homes have an outstanding track record in residential development and have delivered another high quality scheme. With the development nearing completion, the priority was to secure a funding solution which would refinance the existing facility, release some equity and provide long-term certainty without the need for another refinancing exercise in a few months’ time. UTB understood exactly what we were trying to achieve and came back with a well-structured proposal which worked for the clients both immediately and over the longer term.”
Martin Cameron, business development director – structured property finance, at United Trust Bank, said: “Build-to-rent is an increasingly important part of the UK residential property market, and developers need funding partners who understand that completing a scheme is only one stage of the investment journey. At £35.5m, this is a substantial commitment to a new UTB customer, and a good example of how our structured property finance team can provide flexible, commercially attractive funding for larger and more complex property transactions.”
