€11million international development loan on luxury villa estate in Ramatuelle


A private team of developers came to Enness after a personal referral from a private bank in our network, looking to develop over 10 luxury properties as investments within the next five years.

My clients wanted to borrow €11million, in order to complete the full purchase and development of a luxury villa estate in Ramatuelle, just outside of St Tropez. Broken down, my client required €5.3million to purchase the land itself, €4.7million for the construction work, development and financial costs, with €1million left over as a safety net in the event the project runs over budget.

The immediate difficulty I faced with this case, was to find a lender who was prepared to finance 100% of all project costs, with my client only looking to place an absolute maximum of 30% as assets under management (AUM).

In order to overcome these difficulties, I specifically targeted banks with an appetite for this kind of purchase and renovation project. The household names among the blue-chip French lenders and large multinational banks had no interest in the project for a variety of reasons. For example, many of these large banks do not finance this kind of project as they view them as ‘one-off’ projects whereby there is no opportunity to develop a further private banking relationship. Others required 50% AUM, whereas some refused the file because it is too commercial in nature.

Thus, I had to opt for the ‘second rung’ of French lenders, who are not necessarily geared to help non-French investors specifically, but who could provide a 100% loan to value (LTV) at a competitive rate with modest AUM requirements.

I approached two banks who have a strong appetite for purchase and renovation projects. Each of the lenders provided illustrations with 30% as the absolute maximum AUM requirement, which even has the capacity to be reduced towards 20% as the negotiations develop.

My client was resultantly offered two fantastic rates by each of the local banks:

  • €11million, Interest Only loan over 5 years, equal to EURIBOR plus three months
  • €11millon, Interest Only loan over 5 years, 3% fixed for the life of the loan, with €2-3million AUM requirements

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