Arc & Co. has completed a £12m development loan with ME Developments and Octopus Real Estate in Isleworth, London. The development is directly opposite Isleworth Station and the first major residential development in the area for 2 years.
ME Developments has plans to build over 1,000 houses and apartments with a value of over £400m over the next three years.
Deal Outline:
• Loan size £12m
• GDV of £25m
• Lender Octopus Real Estate (development team)
• Asset Two mixed-use towers comprising 53 apartments and 7,000 sq.ft. of offices
• Type of finance Development facility (loan)
• structural warranty sourced by London Belgravia Brokers
• LTGDV 67%
• LTC 83%
Deal Complexity
A golden brick payment was payable on the affordable housing, which ME Developments has to exchange on prior to completion. The affordable housing sale has been agreed with L&Q. Octopus Real Estate were excellent in adapting when necessary to meet completion deadlines.
Due to the scheme’s healthy profitability, Arc & Co. were able to structure a high loan to cost facility while maintaining a competitive financing cost.
ME Developments has plans to expand across the Home Counties and outskirts of London, benefitting from a buoyant residential property market. This market activity has increased the availability of innovative funding available from institutions and international investors who recognise the opportunity in the UK's residential property sector.
ME Developments have recently appointed an advisory board with HE Shaukat Aziz (Ex Global CEO Of Private Banking Citi Bank And Former Prime Minister Of Pakistan) And Lord Norman Lamont (Former Chancellor Of The Exchequer UK) with Bashir Ahmad, CEO of Halkin Investments, as Non-Executive Chairman of ME Developments.
Cameron Hayes, Asset Finance Advisor at Arc & Co. says, “It was excellent to work with both ME Developments and Octopus Real Estate on completing this loan, which will be the first stage in achieving ME Development’s growth plan.”
Simon Marshall, Founder and CEO at ME Developments says, “It was a pleasure working with Arc & Co. and Octopus Real Estate on this complex transaction, in order to help us achieve our 1,000 homes in 36 months target. Arc & Co.’s best in class financial advice, coupled with the fire power of Octopus Real Estate has been vital to achieving this.”
London Belgravia Brokers (LBB) was introduced to ME Developments by Arc & Co in order to arrange structural warranty cover for the 53 unit scheme in Isleworth, with a total GDV of £25m.
Senior Broker & Head of Desk, Jamie Milne, was able to provide comprehensive and independent insight about the market and the availability of products most suitable for the project. Jamie also navigated through the added layer of complexities and mandates, as stipulated by the housing association.
In addition, London Belgravia secured exclusive payment terms which allowed ME Developments to secure their warranty with just 20% down payment and remaining premium spread over the 10 month build period.
Jamie further commented:“We are delighted to support ME Developments on this new scheme, which will create much needed modern homes in the south east of the country. We have been very impressed by their projects in the past and are pleased to be assisting them in delivering their impressive pipeline of projects”