Gascoyne Way, Hertford, East Hertfordshire
Ground up development - Residential. Hertford, East Herfordshire.
PIVOT FUNDS DEVELOPMENT OF 7 LUXURY TOWNHOUSES ON FORMER CAR SHOWROOM SITE
The Opportunity
Pivot’s borrowers needed support for the construction phase of a 7-unit scheme in Hertford, with a £5.71m ground-up development facility. The loan would be provided together with a further £1.49m bridging facility secured against an ex-car showroom on the same large site to be converted to further commercial use. Both loans would be completed conterminously, redeeming the existing lender who had facilitated the acquisition and planning phase.
The gated development of luxury 5-bedroom townhouses is on the southern periphery of Hertford town centre, a mere half mile/15-minute walk to Hertford North station with regular direct commuter trains into Finsbury Park, Kings Cross and Moorgate. Each property will have a fully landscaped garden, electric car charging point, 2 parking spaces (one in an internal garage) and the fit-out will be to a luxury/prestige specification.
The Deal
The borrower has considerable experience of delivering developments on several prestigious sites in a previous employment with one of the country’s most well-known house builders. Some of these include at the Royal Arsenal Riverside (484 units with a total build cost of £70M) and Kidbrooke Village[SK|P1] (353 units with a total build cost of £60M). This experience provided reassurance of the expertise and capability of the developer.
The commercial part of the site will be refinance onto a long term commercial mortgage following the agreement of a long term lease with a well know gym operator.. Because the lease had not concluded at the start of the project, Pivot provided the bridge at the same time as the development facility.
The development itself is a traditional build using brick/block with a cut timber roof on mass fill strip concrete foundations. However, there were complications that had to be assessed and overcome, such as complex ground investigation works given the previous use as a car dealership and potential for contamination.
The completed units are expected to reach build completion by month 12, and the borrower will then have a further 6 months to sell the properties.
Key Transaction Highlights
• Although the borrower is significantly experienced, this is the first scheme on this scale being delivered by them personally.
• The deal covered a diverse security package involving the primary asset, an adjacent commercial property, as well as an additional residential property.
• Two loans had to be drawn on the same day for the same borrower.
• An incumbent bridge lender was redeemed as part of the transaction.
Deal Team
Relationship Manager: Tim Akin, Pivot
Credit Manager: Jay King, Pivot
Legal: Mark Greenhalgh (Real Estate Finance) and Sarah McFarland (Construction), Fieldfisher
Valuation: Capital Value Surveyors
Project monitoring: Cluttons
Shahil Kotecha, CEO at Pivot, said:
“This is exactly the type of transaction that Pivot is set up to offer. In this example, supporting a client with significant experience working for a national housebuilder but now with his own venture. Our team were able to utilise their planning, construction and general development experience to full effect to get the transaction over the line”
Lee Neenan, Director at Irwell Mortgage:
“Pivot’s attention to detail, professionalism and quick thinking has really helped structure this in the best possible way for my client. It has not been the most straight forward of transactions, but, more importantly, Pivot, as a lender, adopted a flexible approach to help deliver the client’s desired outcome, which has been nothing short of brilliant.”
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