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Creative solution for highly geared development

Article by Chris Oatway Co-Chief Executive Officer

What was the situation?

In 2018, we completed on short-term funding on a large office building in Newcastle which did not have any planning permission. The client secured a planning uplift for 322 units and was looking to flip the site based on the planning uplift.

What was the issue?

This was a large site where we had to work off a three phased strategy to reduce the risk and required high leverage. This was a step up in project size for the new developer and the developer was also going construction manage the project – due to the step up in development size, this restricted options.

What was the process?

Through my close relationship with clients, I knew this opportunity would be suitable for a specific developer who we put in place to purchase site. After sourcing the site for the new developer, I then arranged finance for the purchase; a true cradle to grave experience. The new developer then reworked the planning between exchange and a deferred completion.

What was the solution?

We put together a deal which worked well for both vendor and purchaser which meant the vendor got the maximum return they were looking for and the purchaser could minimise the equity contribution they would need to make and resulting in an exceptionally high expected return on investment. Both parties were extremely happy with the outcome and although there were challenges, through high communication levels and tenacity we found a solution to each potential problem.

 

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LDNfinance were on the ball, helpful, supportive and nice to deal with. They were brilliant at back channelling with both lender and lawyers. We had tricky development and bridging finance and a short time frame. I would recommend them.

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April 2021

LDNfinance are a very professional and helpful company. We have done several deals though Chris and the Specialist team and I would thoroughly recommend them.

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August 2021

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August 2021

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