£4.3m Development Loan (Guildford, Surrey)

Momenta Finance is delighted to have completed a development loan facility for the conversion of an existing commercial unit, to 23 residential apartments. The borrower required both a development loan, and a refinance to exit their existing facility, both of which Momenta were able to provide in one large-ticket loan.

The Property

Our security comprised of two linked modern former offices over two floors in Guildford, Surrey. The property is close to the A3, which provides access to M25 junction 10 and access towards the South-East. The premises are a short distance from London Road train station and approximately 20 minutes’ walk from Guildford train station, which in turn provides a good service to London and the South East, with the fastest train taking 35 minutes to London Waterloo.

Planning consent has been granted for the conversion of the office building within its existing building footprint to provide for 23 self-contained 1-bedroom flats ranging in size from 398sqft to 463sqft.

The Borrower

The borrowing entity is a special purpose vehicle (“SPV”) established for this development. The principle of the SPV is an experienced developer with a strong track record in conversions and refurbishments all around England.

The business plan and exit strategy was well considered and supported by achievable assumptions, as the borrower has a strong track record in schemes that retain the finished units as part of a wider investment portfolio.

The Solution

Momenta Finance provided a £4.294m facility over an 18-month term, with £2.184m being a day-one draw to refinance the borrowers existing bridge facility, with a further £2.11m being the costs to complete the conversion from commercial to residential apartments. The full facility was below Momenta’s maximum of 70%LTGDV. This allowed the borrower to comfortably exit their existing facility, whilst helping to provide the costs to complete the conversion in a timeframe that suited the borrower.

By both refinancing and having the funds to convert the property into apartments, the borrower was able to have control over the development process, and the following sales period through a competitively structured product.

This transaction demonstrated Momenta’s ability to deliver structured finance solutions that helps developers undergo and complete their projects, without undue time pressures from existing lenders requiring their facility to be exited.