£4.75M GDV | 8 LUXURY RESIDENCES

ENGINEERING THE DEAL BEFORE ENGINEERING THE FINANCE

THE BRIEF

Following the successful completion of a previous development for the same developer, we were brought back to structure finance for a new 8-unit luxury residential development.

The scheme is designed around a premium product, with the completed development expected to achieve a £4.75m GDV.

That equates to an average anticipated sale value of approximately £593,750 per luxury residence.

THE NUMBERS

8 Luxury Residential UnitsLand Position: £1.2mBuild Costs: £2.4mGDV: £4.75mAverage Anticipated Sale Value: £593,750 per unit

THE CLEVER PART

The £1.2m land position could have created a significant funding requirement.

Instead, we engineered the transaction around the developer's existing position.

Following the successful completion of the previous project, the developer secured the new site through an exchange.

This meant the £1.2m land position was already dealt with and did not need to be funded again as an upfront development cost.

We effectively engineered £1.2m out of the initial funding requirement.

THE STRUCTURE

Rather than simply presenting a lender with a £3.6m development cost, we structured the proposition around the capital actually required to deliver the scheme.

£1.2m land — engineered out.£2.4m construction — the core funding requirement.£4.75m GDV — underpinned by 8 premium residences.

With an average anticipated sale value of £593,750 per unit, the scheme offered a strong value proposition while allowing the developer to concentrate capital on construction.

THE RESULT

An 8-unit luxury development, with an average anticipated sale value of almost £600,000 per residence once completed.

The developer had already secured the land position through the exchange.

We then engineered the finance around the build.

£2.4m to build. £4.75m GDV. 8 luxury homes.

This wasn't simply a case of finding finance.

We engineered the deal so the finance worked harder.

ALWAYS WRIGHT

Always Wright Mortgages — Kings of Complex Property Finance.