At the end of 2017, we completed on an extremely complex project – a £17million facility to finance a mixed use commercial portfolio.
The portfolio consisted of a diverse range of assets, including a student accommodation block, a large government building, an office block and a job centre. To complicate the case even further, these buildings were spread across England, Scotland and Wales.
Many lenders will shy away from lending of this kind, as many are restricted in terms of where they will lend and what they will lend against. So, when the assets are this diverse, and located in multiple locations, it poses a real challenge for us as brokers.
This is where having access to the entire market of lenders is crucial, as it means you will find one who has an appetite for your case. It often requires a very niche lender who you might not be able to find yourself, so contacting a broker for advice is a great place to start.
Future of commercial portfolio investment
Commercial investment is becoming increasingly popular, but we do find some lenders somewhat slow in keeping up with this.
We think we will see more lenders opening their doors to cases like this, as investors are seeking returns outside of the traditional London residential property market.
This is a clear effect of the changing tax landscape, an increasing search for yield amongst international investors, and the market slowdown in the prime property markets in London. However, it does show an unchanged appetite to invest in the UK during the Brexit negotiations – the weak pound being a main contributor.
Savvy investors know that there are higher yielding assets elsewhere in the county, and also across different asset classes. Sterling is comparably low so those who are holding non-sterling are maximising on this, investing now to seek returns when it regains strength.