Arc & Co. director Cameron Hayes has arranged two loans totalling £4.8m to support a property developer in Hampshire with a project of five detached houses.
The senior development facility of £3.7m is being funded by a challenger bank and is paired with £1.1m in capital from a JV equity partner.
Pricing on the 65% LTGDV senior loan is 4.5% + BBR. The equity portion was charged at 7% priority return and a simple profit share in favour of the sponsor.
The equity partner provided 100% of the net LTV, fully funding the construction costs, land purchase, and covered all the client’s associated costs, including legal and valuation fees upon completion.
This transaction is the first in a series of strategic joint ventures between the two parties, targeting small housing sites throughout the UK.
The client has a good track record of pre-sales, having sold similar sites before practical completion on each occasion.
Cameron commented:
“The JV partner is extremely well capitalised, focusing on working with experienced developers on residential sites.
“We are pleased to expand the client’s funding relations and establish the partnership between both businesses.
“For many developers, equity remains constrained, so it’s vital to work with an advisor that has the necessary relationships at all levels of the funding stack to get deals over the line.”