Sirius Property Finance sources funding for £14m GDV permitted development scheme

By Bridging Loan Directory 21st October 2019

Sirius Property Finance has sourced joint funding for a £14m GDV permitted development scheme in Sutton Coldfield, with senior debt from Aldermore Bank and mezzanine finance provided by Iron Bridge Finance.

Overview

The £14m project was supported by a total debt package of £7.47m, with Aldermore providing senior debt of £6.12m and Iron Bridge £1.35m of mezzanine to Brickmort Developments Ltd in order to refinance and develop the site.

Brickmort Developments Ltd were advised by property finance experts Sirius, who were mandated to source both the senior and mezzanine debt on the deal.

This case was a great example of all parties working together to overcome some significant challenges, particularly in relation to obtaining vacant possession due to an existing tenant being inside the Landlord and Tenant Act. Both lenders adopted a flexible approach and in close collaboration to find the right solution.

Case Information

Brickmort Developments Ltd are experienced property developers who focus on commercial to residential conversions under the Government’s Permitted Development scheme.

Four Oaks House is a three-storey modern office building has permission under Permitted Development for conversion into 77 residential units. Brickmort obtained planning permission from Birmingham City Council for the erection of a side extension and one new floor comprising 13 flats.

The property is in a strong location, being adjacent to Four Oaks train station and opposite the exclusive Four Oaks estate and 8 miles north of Birmingham city centre.

Case Summary:

The Property: Four Oaks House, 36,256 sq. ft office building, Sutton Coldfield

Broker: Sirius Property Finance

Lenders: Aldermore Bank (senior) Iron Bridge Finance (mezzanine)

Completion date: September 2019 (expected development completion July 2021)

Developer/client: Brickmort Developments Ltd

Sirius Co – founder, Nicholas Christofi, says:

“This was a very complex deal for a client with whom we have worked for more than five years. The property was tenanted by a global company and so we needed to make sure we worked with the most appropriate lenders, with expertise around the potential legal risks. Using a combination of both Aldermore and Iron Bridge, we were able to deliver a very attractive debt package for the borrowers to enable them to carry out the development of a key site in Sutton Coldfield. The key to this deal was the relationship between all parties and the desire for us all to deliver a funding package to suit the client as well as the lenders.”

Greg Tarn, Associate Director – Credit, at Iron Bridge Finance, says:

“At Iron Bridge, we pride ourselves in finding solutions to problems, and this case was no exception. Closing this deal with like-minded partners was immensely satisfying and we are delighted to able support this scheme.”

Keir Morris, Property Development Manager, from Aldermore Bank, says:

“We’re pleased to be able to provide funding for this scheme given some complex challenges surrounding the legal title of the property. Thanks to the collaborative approach of all parties, including Sirius, Iron Bridge and our legal advisors, we were able to get our client the funding they were looking for. It’s a great example of how complex deals can still be done within development finance.”