Hilco Real Estate Finance has closed a significant £6.7m loan for a Newcastle property developer.
- The loan, arranged at 62% loan to value, extends over a 12-month period.
- Assets secured by the loan include a luxury build-to-rent development, commercial units, and residential apartments.
- This financial move will enable the refurbishment of another property while stabilising existing ones.
- Newcastle shows strong potential for high-quality build-to-rent schemes, according to experts.
Hilco Real Estate Finance has taken a notable step by providing a £6.7 million loan to a prominent family-owned property developer based in Newcastle upon Tyne. This financial engagement is structured at a 62% loan to value over a term of 12 months, aimed at refinancing existing facilities and releasing equity. Finalising this loan will allow the developer to complete refurbishments on an additional property.
The loan is secured against a variety of assets ranging from a new luxury build-to-rent (BTR) development, to several commercial units and residential apartments located centrally in Newcastle. Such strategic deployment of funds underscores the lender’s confidence in the project’s viability and in the burgeoning BTR market within the city.
Fiona Smith and Mark Nixon from Finance 55 introduced this transaction, with valuation inputs from experts Lambert Smith Hampton and Cluttons. The legal due diligence for this financing was spearheaded by Marie Pugh from Clarion Solicitors, ensuring a comprehensive assessment of the associated risks and benefits.
Patrick Davenport-Jenkins, who played a key role in originating this loan, mentioned that the transaction provides the developer with necessary liquidity and flexibility. According to Davenport-Jenkins, ‘This loan gives our client the time and flexibility they need to meet their financial aims over the next 12 months.’ He emphasised the exceptional nature of the BTR scheme in Newcastle, noting its contribution to enhancing the city’s property market.
Comparing Newcastle to other cities such as Leeds and Manchester, which already have established BTR markets, the potential within Newcastle is evident. This loan not only stabilises the asset but also empowers the developer to pursue optimal long-term financing strategies.
Hilco Real Estate Finance’s loan marks a substantial investment in Newcastle’s promising property market.
