Case Study: Securing Development Finance for a Mixed-Use Property Development

 

The Situation:

A property developer approached Bugle Finance with a plan to develop a mixed-use commercial and residential property on a prime piece of land. The developer had an established track record in residential developments but had limited experience with mixed-use projects. They needed a tailored development finance package to fund the project and bring their vision to life.

 

The Challenge:

While the developer had successfully completed several residential projects, this mixed-use development involved both residential and commercial elements, adding complexity to the financing. Additionally, the project was located in an area undergoing regeneration, which introduced some risk factors that lenders typically shy away from. Securing the right finance for this type of development was proving to be a challenge, especially with the developer’s limited experience in mixed-use projects.

 

Our Solution:

Bugle Finance worked closely with the developer to fully understand their goals and the specific requirements of the project. We then structured a bespoke development finance solution that covered both the construction costs and the required working capital. By presenting a solid business case and risk mitigation strategies, we introduced the developer to a specialist lender who was willing to provide finance for mixed-use developments, even with the developer’s limited experience in this area.

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• Loan Amount: £3,500,000

• Lender: Specialist development finance lender

• Loan-to-Cost (LTC): 80%

• Loan-to-Value (LTV): 70%

 

The Result:

The developer secured the necessary funding to proceed with the development, which included building 20 residential units and 5 commercial retail spaces on the ground floor. The project is expected to generate steady rental income from the commercial units while providing much-needed housing in the area. The lender’s confidence in the developer, combined with the strong local demand for both residential and commercial space, ensured the success of the financing arrangement.

 

Client Testimonial:

"Bugle Finance helped us navigate the complexities of securing development finance for a mixed-use project. They understood the specific challenges we faced and worked with us to secure a competitive deal with a lender who saw the potential in our vision. The process was efficient, and thanks to their guidance, we are confident that this project will not only be a success but also contribute positively to the local community."
— John Matthews, Property Developer, Yorkshire