Remortgage of £11million asset from development to commercial finance

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Refinancing from development finance is an important step for property investors when it comes to managing cash flow and expenses.

Enness arranges property finance across a range of areas, whether that’s financing a holiday home in Spain, a buy-to-let property in Monaco, or a residential property in London. Our development and commercial teams can also assist with commercial investors. As such, we often receive cross-referrals; one of my most recent cases was referred from the Enness International team, as they had been working on remortgaging my client’s French property.

My client was a property investor and developer, who had recently completed a development and was therefore looking at remortgaging from development finance onto regular term finance. Development finance is expensive is comparison to standard term finance, and my client was in a good position to refinance from development finance, as they had a commercial lease agreed with a large call centre firm.

The development, located in southwest England, was valued at £11million. The difficulty with this case was that my client was particularly price sensitive and wanted a lender who would allow a second charge from a wealth management group working behind my client. The location of the asset was also slightly unusual, as it was not in what is usually considered a prime commercial spot.

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Fortunately, having placed deals of this nature across the market on many occasions, I was able to locate a lender who was willing to work with the client at a very competitive rate—perhaps the most competitive rate I have seen on a commercial investment of this nature.

This lender had a large appetite to work with this client, and was happy to fund a large deal in a ‘secondary’ location. This lender offered a 5-year term on a facility of £5million, at a rate of just 2.49%. This was an excellent example of how important refinancing from development finance is: if you have recently completed a development and are looking to refinance, I would be happy to advise you further.

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