Conversion of redundant office building into block of 18 flats
The Client: Newly created Special Purpose Vehicle (SPV) limited company owned by two directors.
Previous Experience: One director had spent many years as a project manager for a major construction company with some recent relevant experience in their own right. The other, a successful local businessman who had sold his company for a substantial sum and was investing in various diverse projects including this one with his co-director.
The Challenge: To minimise the borrowers' cash contribution and allow them to look at another project simultaneously.
The Project: The property is a large office block located in a seaside town on the south coast of England that the previous owners were struggling to let, so they put it up for sale.
Having set up an SPV limited company for property development purposes, our clients purchased the block for £300k cash in March 2013. They then obtained approval to convert to it into 18 x self-contained flats under permitted development rules.
Because of the directors’ previous experience and high net worth status, and because the building could be developed without having to adhere to any particular planning restrictions, we found a lender who was happy to lend at 60% of the gross development value. It was agreed that funding would be advanced in stages subject to sign off by the quantity surveyor.
The development is expected to be completed by January 2015.