FRP has arranged a £1.43m heavy refurbishment bridge to convert a Grade II-listed former smelting shed in Swansea into 12 apartments. The borrower plans to let the homes on a buy-to-let basis once the works are complete.
The 18-month facility was structured at 65% loan-to-value (LTV) and will fund refurbishment of the building, which has a footprint of around 600 sq m. The shed forms part of the former Upper Bank Works, founded in the mid-18th century.
The project reflects the challenges involved in bringing historic buildings back into use. Swansea was once the world centre of copper smelting, but few structures from that period remain. Cadw estimates that between 8.5% and 9% of Wales’s 30,119 listed buildings are at risk.
Listed buildings must be repaired and adapted within conservation requirements before they can be converted into homes. Those restrictions can make projects harder to fund. At Swansea, the £1.43m facility will cover that refurbishment stage ahead of the conversion into residential units.
Sam Beaumont, Finance Advisor in FRP’s Real Estate Advisory team, led the transaction. Lenders considering a Grade II listed building may require specialist valuations and additional checks, while resale can prove more difficult if a loan runs into trouble.
Energy efficiency requirements can also present challenges for rental properties where conservation rules limit changes to the building. The former smelting site’s environmental and contamination risks added another consideration for lenders.
With a limited number of lenders willing to consider the scheme, Beaumont worked through the market to find one prepared to support the refurbishment.
“Listed buildings throw up questions that a lender needs answered early, and a lot of the work on this one happened out of sight, long before the homes were visible,” said Sam Beaumont, Finance Advisor at FRP (pictured).
“There was plenty to work through between the valuation and completion, so my job was to stay close to everyone involved and keep things moving, so the lender could lend with confidence. This shed has stood in Swansea for more than 200 years, and it is a great feeling to see it turned into high-quality housing.”
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