Avamore Capital completes £1.8m development exit loan

By Bridging Loan Directory 15th April 2019

Avamore Capital has completed its first ever deal in Birmingham which falls under the lender’s innovative Finish & Exit (sub) product. The c.£1.8m loan was introduced by Nicholas Christofi, Co-Founder of Sirius Property Finance and it is the first transaction which Avamore and Sirius have worked on together. The loan reflects existing market dynamics with the regions showing strong signs of growth along with increased borrower demand for a finish & exit product which allows final works to be completed and time for a suitable exit.

Nicholas Christofi commented:

“Avamore was superb in structuring a part-built development to exit facility. The process from start to finish was quick and precise. There was always great communication between us, and the transaction analyst and we were always provided with great feedback and genuine next steps. Good common-sense approach to lending and overall a very positive experience.”

The loan was against a 4-storey, 11-unit development comprised of 7-town houses, 3-individual apartments and 1-office located in Birmingham’s vibrant Jewellery Quarter. The borrowers from Northwood Street Developments Ltd are experienced developers with a focus on office-residential conversion schemes, overtime, the pair have built up a portfolio of c.1200 units outside of London. The property is centrally located and just a 20-minute walk to the Bullring, the city’s main shopping centre and Birmingham Grand Central Train Station. There is a distinct lack of houses in Birmingham city centre and the completed units will appeal to a range of buyers including young professionals and families working in the local area. Furthermore, following the introduction of the HS2 train line, inter-city commuters will be able to travel to London in 49-minutes.

This is the first transaction which Avamore has closed in Birmingham and the transaction represents a shift towards good development opportunities outside of London. The deal is ‘in-tune’ with existing market dynamics; on the buyer side it is reported that there is greater demand in the regions; one reason for this it that businesses are increasingly opening offices in regional cities that offer more attractive and affordable living prospects and so development activity continues to be strong. Furthermore, on the developer side, Brexit uncertainty is driving labour shortages, costs over-runs and unexpected delays which has generated a clear demand for a product which allows the developer to complete final works and exit the scheme when loan terms on existing facilities have expired.

Philip Gould, pictured, Senior Underwriter at Avamore led on the transaction and commented:

“This is the first deal I have closed since joining Avamore last month, it was certainly a unique case and it was great to work with Nick on the transaction. With any Finish & Exit, there were a number of factors to consider however, the team took a collaborative and dynamic approach to get the deal over the line. We are probably the most experienced lending team in the market when it comes to finish & exit schemes and in addition to that we offered competitive leverage on the deal at a very attractive rate.”