We received an enquiry for the purchase of two retail assets (2x brand new Tesco Convenience stores) located in Liverpool. They were being purchased as an investment by a wealthy father for his two daughters. Each unit benefited from a brand new lease of 15 years each. We were asked to find a solution from a UK high street bank with a very low cost of funds. Purchase price of each unit stood at £2.75 million GBP.
The family had a history of commercial property ownership and were prominent landlords with a large portfolio located in the Liverpool area. They had the cash to purchase the properties outright so as a business we were incentivised to find the cheapest possible rate in the market in order to make the loan an attractive option to the buyers.
Problems to Solve
The market for retail units is quite challenging post-Covid and many banks are extremely risk averse to providing loans on such assets. Many of the UK high street lenders are still providing commercial mortgages in the retail sector but at conservatice loan to values. Fortunately these clients had the cash to increase theri deposit to accommodate this.
We presented the following solution to the borrowers which represented the lowest interest rate the market for this particular asset class.
55% Loan to Value
3.00% 5 Yr Fixed
10 year term
Fees 1.25% Arrangement