Aria Finance successfully arranged a tailored development finance facility to assist a client in clearing a tax liability and resuming construction on a light industrial and office development.
The Client:
Our client, a property developer, required funding to address a pressing tax obligation of approximately £1.2m while ensuring the continuation of their commercial development project. With the asset being unencumbered, the client had a strong security position to leverage the required funding.
The Situation:
The property comprises two partially completed terraces, featuring 15 light industrial units ranging from 1,598 sq ft to 4,342 sq ft. Four units were designated for office use, while the remaining units include modern industrial features such as electric roller shutter doors and mezzanine office spaces. Located in a key business district close to the local town centre, the development benefits from great transport links and new-build status, making it highly attractive to potential occupiers.
Despite the project’s strong fundamentals, the client faced immediate financial pressure due to a tax bill. Additionally, construction works had halted, requiring structured funding to ensure completion within the next 8-12 months.
Our Solution:
Aria Finance structured a development finance facility with a total gross loan of £3,737,460. An initial gross advance of £1,915,000 was provided to settle the tax liability. To further support the client’s specific needs, we implemented a drawdown bridge tailored to the development project. This innovative approach allowed the client to access funds in phases, aligning with their cash flow and project milestones.
Importantly, we structured the facility without requiring a Quantity Surveyor removing an additional layer of oversight that could have delayed progress. By eliminating this requirement, the client was afforded greater flexibility in managing construction timelines, ensuring they could restart work efficiently and at their own pace.
Given the complexity of the client's financial arrangements, our team coordinated consent to the charge with the company’s existing lender, which held a debenture over another portfolio loan arranged in February 2024. This seamless negotiation ensured there were no delays in securing the necessary funding.
Benefits & Results:
The drawdown facility provided an efficient funding structure, allowing the client to access funds in phases. This aligned with their construction schedule and cash flow requirements, ensuring that the project progressed smoothly without financial strain.
From a market perspective, the valuation report highlighted strong demand for such units, particularly from owner-occupiers. Anticipated rental values ranging from £14 to £19 per sq ft confirmed the development's commercial viability and demonstrated its attractiveness.
Despite the complexity of the deal and the client being based in Dubai for much of the process, we delivered the facility at a pace that suited their schedule. Terms were issued within 24 hours of the initial enquiry, and the transaction was completed within eight weeks—demonstrating Aria Finance’s ability to move efficiently on intricate cases while aligning with the client’s unique circumstances.
Ultimately, the client was able to meet their financial obligations while keeping their development on track for completion within the expected timeframe. This enabled them to unlock the asset’s full potential and ensure a successful outcome for the project.
This case study exemplifies Aria Finance’s expertise in structuring bespoke funding solutions, ensuring developers can navigate financial challenges while maximising the potential of their assets.