One of our professional introducers based in Geneva, approached us to assist one of their HNW clients who need a loan refinance on a large residential building in south west London. Their client had redeveloped a large freehold mid terraced property into 15 self contained studio flats and needed to refinance the existing debt now that the building was fully let. The property was worth £8 million and the loan requirement was £4 million.
The Emirati client, based in Dubai had a large property portfolio in the UK and was mostly financed by Middle-eastern banks. He had a large deposit cash and other liquid assets which made him a perfect candidate for UK European private banks which funded property at very low interest rates. Affordability was therefore not an issue which allowed us to go out to market in search for the cheapest possible cost of debt.
Problems to Solve
Many lenders had an issue with the fact that they were financing 15 individual flats taking up roughly 100% of the security building. This creates concentration risk for lenders as many of the UK banks have lending policies that preclude this scenario. Fortunately the clients large liquid asset base allowed us some flexibility from the banks we approached as they placed a large emphasis on funds under management. We managed to secure an excellent rate from a UK private bank which was willing to adjust their credit policy to accommodate the unique security property.
We refinanced this clients loan on the following terms:
50% Loan to Value
1.50% + Bank COF
5 year term
0.50% Bank Fee
£1.5 million AUM