Avamore Capital finances Bournemouth scheme with ‘Finish & Exit’ product
Avamore Capital has closed a £3.58m facility in Bournemouth which falls under its ‘finish & exit’ product. The lender has closed similar deals in the last 3 months equating to an aggregate sum of c.£14m. Following this initial success, Avamore expects to see a rise in demand for the product throughout 2019.
This ‘finish & exit’ product is for schemes which are not eligible for a traditional developer exit because the project has not been sufficiently completed. In many cases, the scheme does not have final building control sign off or new homes warranties which would be a pre-requisite for a straightforward exit bridge or buy-to-let facility. In this situation, Avamore can provide either early equity releases pre-PC or additional liquidity to complete schemes where the existing facility has expired or there is no build facility remaining.
Amit Majithia, pictured, Principal at Avamore Capital commented:
“We are very excited about the rise of Avamore’s ‘finish & exit’ product. We closed the first of these in Southampton in October completing our largest deal at our lowest ever rate and since then, we have seen a notable rise in similar enquiries. We can assess each bridge deal with a development ‘lens’, looking into factors such as the cost left to complete. We also have the in-house expertise to underwrite the deal without the heavy involvement of the monitoring surveyor. Our solution is a huge benefit for developers and a real example of Avamore listening to what the market needs and reacting to that. Additionally, we are delighted to have closed our first deal with Piragash and would like to thank him for introducing it to us.”
The Bournemouth project which had not yet achieved practical completion saw the conversion and extension of an office building into 28 apartments, 12 of which had already been reserved at the point of completing the transaction. Avamore stepped in to refinance the existing development lender and also brought in junior lender, ZSL Capital to provide additional funding for the scheme. ZSL contributed £340,000 to the deal bringing the total loan to c.£3.9m; the property has an expected GDV of £5.4m.
Daryl Thorpe, co-founder and principal of ZSL Capital, said:
“We are delighted to have closed this transaction in such a short time-frame. We are very pleased with the outcome particularly as the transaction has further consolidated our strong relationship with Avamore. It also gave us the opportunity to work closely with Piragash, and we hope this will be the first deal of many with him. We are looking forward to continuing to work with Avamore to provide additional stretch funding on projects where required, not only with the ‘finish and exit’ product, but also alongside their wider product offerings”.
Avamore worked closely with ZSL, the borrower and the broker to complete the transaction in c.8 working days. The lender’s ability to manage multiple parties and tackle a number of challenges helped drive the deal to successful completion.
The broker, Piragash Sivanesan, Founder of Totum Finance commented on Avamore’s conduct:
“Avamore took on a difficult case both in terms of execution but also in terms of working to a tight deadline…The team’s dedication to ensuring completion of the loan despite challenges was refreshing…Avamore is well-resourced but equally full of knowledgeable professionals that were a joy to work with. We hope to do more with this group”.