Plugging the development finance gap
Posted on Sep 14, 2017 | in Blog
Our pipeline is already looking fantastically healthy but it's set to grow even more with the official launch of our development arm last Tuesday.
Initially, our development proposition will focus on conversions and lighter refurbishments. But our goal is to cater for heavy refurbishment by the end of 2017 and full, ground-up funding by Spring next year.
On the same day last week, we also announced that we have hired Alex Tyrwhitt as Head of Development Lending. Getting someone of Alex's calibre onboard is a fantastic coup for Octane and will hopefully show that we mean business.
Alex knows the sector inside out and will be instrumental in making us the stand-out lender for development finance. As I’ve said before, we are not here to make up the numbers.
There's certainly a lot of demand right now for this type of finance. While the political and economic climate remain uncertain, one thing remains as constant as ever — the lack of supply in the UK housing market. And it's this that's driving developers to grasp the opportunity and build out new schemes.
And with the high street banks still wary of development lending, there's a significant gap in the market for professional, fast and flexible funding. It’s a gap, you guessed it, that we fully intend to fill.
Towards the end of last week we also announced the completion of a particularly complex loan, for £7.4m. The loan, primarily for the acquisition of a large office in Southend with planning permission for 140 units, involved all manner of moving parts.
Not only were there three corporate borrowers (one BVI-based) with the same UBO, but there were multiple securities, one of which we enhanced with a slither (well, a Ј720,000 slither) of development finance.
To top it all off, as the main UBO lived in Jakarta, and had previously met his London-based solicitors, we were happy for the client to sign the legal documentation via Skype video conference. How things are changing in the digital age.
Anyway, this loan is a textbook example of the kind of deals we are looking to fund. Anything that makes other lenders head for the hills, you'll find us at the head of the queue. It's about as far from vanilla lending as you can realistically get but right in our sweet spot.
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