Excellent partnership working to assist a first-time borrower
Location: Sheffield, South Yorkshire
Developer: GSD Riverside Ltd
Date: 20th February 2017
Example of: Development funding
To provide funding of LTV 66% at £5.5m against a GDV of £8.34m
A new client, that had previously self-funded their own developments, was building a 127 unit student accommodation block. A contaminated site, plus the developer's unique business model (40-70% deposits on exchange) were deterring other lenders. Although the client had strong connections with private investors, they needed the credibility of backing by a lender like Amicus before they could market the property.
Amicus Property Finance Divisional Director Yasin Patel invested time to fully understand the developer and the site, including the historic contamination issues and steps taken by the previous owner to mitigate construction risk. The location of the site was excellent and the developer's overseas sales agents had secured some pre-sales. Once the costs to complete and valuation costs were confirmed, Amicus approved a loan of circa £5.5m with just 28 days to completion.
By supporting the development, Amicus effectively provided the funding platform and the credibility the developer needed to market the property to private investors. More than 75% of the units have now been pre-sold and the developer is on track to generate a profit in excess of £2m.
Amicus has understood our business model to the core. They took the time to see how we work and made the finance fit in around us. The support throughout the process was second to none. It has allowed us to take a huge leap forwards from self-funding our projects to growing our portfolio rapidly. It has given our clients the confidence to invest in a scheme backed and funded by a reputable lender.
We feel and hope we can maintain a long and healthy relationship with Amicus and look forward to doing further business in due course.
Kamran Khan, GSD Riverside Ltd