LHV Bank funds £3.6m commercial investment loan

By Bridging Loan Directory 13th August 2024

LHV Bank has completed a £3.6 million commercial investment loan to help the client refinance an existing loan facility on a large office building in Ashford, Kent.

The refinance was required urgently due to the existing facility expiring soon, plus the property had a short 1.57 year weighted average unexpired lease term (WAULT) to break.

In addition, there was potential for value deterioration due to wider market and economic conditions and so the client wanted to carry out refurbishment works to improve the property and increase its rental income and market value.

The property were good quality secondary offices and income producing with mixed tenant covenants in situ including strong government backed tenants.

The £3.6 million 5-year term loan facility provided by LHV Bank was provided quickly to ensure the client could concentrate on letting the vacant space, whilst a six-month interest only period was included so that light refurbishment works could be carried out on the vacant floors.

LHV Bank offers commercial real estate investment loans and trading loans from £0.5m to small and medium-sized businesses in the UK, plus also operates in the Specialist Buy to Let sector.

Conor McDermott, director of SME lending at LHV Bank, commented:

“There were a number of factors to unpick on this deal, but it was clear at the outset that the borrowers, who are experienced property professionals with an excellent track record, had a clear and well thought out plan for the asset.

This has been borne out since completion, as two vacant floors have subsequently been let, increasing its rent roll significantly and so reducing voids.

In addition, it was a pleasure to work with Michael at Home of Specialist Finance, for whom it was their first case into LHV Bank, and so we look forward to working with them on many future cases.”

Michael Thompson, Lending Director at LHV, commented:

“Notwithstanding this can be a challenging sector, working with Michael and the Home of Specialist Finance team, we structured a solution to support a highly experienced borrower and met the timescales set out at the onset.

It was delightful working with Michael, and I look forward to the next opportunity to assist.”

Michael Collins, Commercial Broker at Home of Specialist Finance, said:

“We had difficulty finding a lender for our client’s proposal.

Lenders were hesitant because the proposition involved an ‘out of London office complex with leases that didn’t meet all the criteria.

Luckily, we learned about LHV Bank in the trade press and got in touch with Michael Thompson.

LHV was willing to evaluate the proposition based on its merits rather than just checking boxes.

The combination of high-quality tenants, strong covenants, an excellent management team, and ownership with extensive property expertise gave them the confidence to support the proposal.

The fact that the deal was successfully closed on time is a testament to the hard work and dedication of Michael and his colleagues in achieving a great result for our clients.”