Victoria Street, West Bromwich
OFFICE TO RESIDENTIAL CONVERSION INCLUDING AIR-RIGHTS FOR ADDITIONAL HIGHER FLOORS
Gross loan: £4.217m LTGDV: 70% Location: West Midlands Originator: Vishal Dixit
Victoria Street, West Bromwich.
The Opportunity
Pivot originally provided a bridge facility to support the purchase of a 4-storey vacant office building in a prime West Midlands location, with prior approval to convert it to 33 residential units plus 25 parking spaces at the rear. This facility afforded the borrowers the time required to re-work the planning and gain further approval to build an additional 2 floors into the air space, giving a total of 45 units. Subsequently, Pivot have supported the seasoned developers with funding for 100% of the construction costs.
The multi-unit scheme comprising studio, 1, 2 bedroom and duplex apartments are a BTL investment given the proximity to Birmingham and the local university, and will be marketed off-plan to the foreign investor marketThe location is 50 yards from the main high street; it is in easy walking distance to various shopping and leisure facilities, and the tram station with a 15 min journey to central Birmingham. It is a 5 min drive to J1 of the M5.
The existing building presented a good opportunity for conversion, already having 2 lifts in situ and gas central heating throughout the property. The integrity of the cement and core mitigated the need for further structural support and was appraised to ensure the additional floors could be added without any issues. A steel frame would be added to the roof, which would house the additional units taking the total number to 45.
The Deal
Pivot provided a stretched senior facility at 70% LTGDV including a land loan which would replace the original purchase bridge provided by Pivot. Financing of the entire project was complex; a majority shareholder was replaced part way through the transaction, a complex inter-creditor agreement had to be agreed with the pre-sale agent / fund and a challenging security agreement had to be agreed with regard to forward-funding of materials. Pivot had worked with the developers previously, which provided reassurance, and the experience of the main contractor included 2 schemes on the same road as the subject property which provided further comfort.
Key Transaction Highlights
Repeat borrower with an enviable track record.
Stretched senior loan was provided at 70% LTGDV.
Forward funding of steel frame agreed
Agreement of end unit pre-sales with an offshore fund
Deal Team
Relationship Manager: Vishal Dixit
Legal: Field Fisher
Valuation: Bruton Knowles
Project monitoring: Bruton Knowles
Alex Kyriacou, Managing Director, Funding Advisory Limited, said: “There are few lenders that understand the often-complex needs of a client quite like Pivot. This case had its quirks, but the team made efforts to understand these very early on, which enabled a relatively effortless completion. Great work again from Vish and the team”
Vishal Dixit, Head of Business Development at Pivot, said: “The case certainly had its complexities – planning play, building into airspace, high gearing and a complex borrowing structure. Effective communication from the outset between lender, intermediary and client was key to getting this to completion in a timely and efficient manner. It was a pleasure to work with Alex on another completion.”
View full details of other case studies at: pivotfinance.co.uk/news