Loan type: Development Finance | Loan value: £17,765,000 | LTV: 70% | Term: 24 Months (18 months for build, 6 months for sale)
Aria Finance recently partnered with a long-standing client on a high-stakes residential redevelopment project. This case study showcases how we tailored a flexible and efficient financial solution, overcoming legal and planning challenges to enable a seamless, phased project execution and support the client’s ambitious goals.
The Client:
A developer, who was a long-standing client of Aria Finance approached us for assistance to facilitate a significant residential redevelopment project.
The Situation:
The property in question was initially a commercial site that had been acquired in 2020 and was poised for transformation into a mixed-use scheme after securing planning permission. The plan encompassed the demolition of existing structures to create two detached blocks, each hosting commercial units and a mix of residential flats. The project’s design, which includes a significant proportion of affordable housing, aligns with local planning requirements and enhances the area’s housing diversity.
However, the project was complex: the property was occupied by a scaffolding company under a lease that had become litigious upon expiration in December 2021. This situation required a highly collaborative approach, working closely with both the client’s legal team and the lender to resolve disputes and mitigate risks.
Securing planning permission and managing tenant issues delayed the initial timeline. With an evolving project scope and delays in the planning process, flexibility was essential to keep the development on track. To adapt, Aria Finance needed to facilitate several extensions on an initial bridging loan while ensuring clear and constant communication with all stakeholders.
Our Solution:
To support this multifaceted project, we structured a facility of £17,765,000 which would encompass both the construction and ancillary costs. There was to be an initial bridging loan which would require subsequent extensions to accommodate the evolving project timeline and financial requirements.
We proposed a 24-month facility which was strategically designed to provide 18 months for construction and a 6-month period for sales. The facility allowed for phased drawdowns aligned with construction milestones.
Drawing on our strong relationships with both the lender and the client, we secured a higher loan-to-GDV ratio than standard criteria typically allow. This flexibility, backed by our history of successful outcomes with the client, enabled us to make a strong case to the lender.
Benefits & Results:
Due to Aria Finance’s proactive approach and our pre-existing valuation from the bridging phase, we completed the development finance loan in just over two weeks. The client now has a comprehensive, phased financial package, providing the security needed to start construction confidently and cover all essential costs. With a robust sales strategy in place, the client is well-positioned for an attractive return on investment.
This case study underscores Aria Finance’s dedication to delivering customised, efficient, and client-focused financial solutions, even for the most complex projects. Our deep understanding of the project’s challenges, combined with a proactive approach, enabled us to address legal and planning obstacles effectively and ensure our client’s success.
This case study demonstrates Aria Finance’s ability to deliver tailored, efficient, and client-focused financial solutions for complex property developments. Our proactive approach and deep understanding of the project’s needs helped streamline processes and address legal and planning challenges effectively.
