“This transaction presented a number of complexities; the assets formed part of a much larger estate, the timeframe was compressed and we had to structure a facility that would evolve with the project’s redevelopment”
– Tony Tadros – SHC Capital
Real estate finance specialist SHC Capital has arranged a multi-stage bridging loan to fund the acquisition and refurbishment of four prime office freeholds in the City of London, in a deal with a gross development value of £23m.
The facility supports a private investment group aiming to double its £100m office portfolio within two years, and reflects sustained investor appetite for high-quality London workspace.
The off-market transaction, completed with legal support from Glovers LLP, involved assets forming part of a larger estate and required a compressed timeline, adding layers of complexity to an already intricate deal structure.
How the deal was structured
The bridging facility was designed to evolve through multiple stages. It initially supports the acquisition of the four office freeholds, then adapts to cover a comprehensive refurbishment phase before transitioning into a stabilisation facility as the project matures.
The investment group is part of a wider property company with a significant mixed-use portfolio. Its specific remit is to expand its office holdings, and this City of London scheme sits at the centre of that strategy.
“This is a first-class property investment group that’s an integral part of a wider organisation with a significant mixed-use portfolio,” said Tony Tadros, director at SHC Capital. “They have a clear, focused remit to expand their office holdings as part of their broader growth strategy.”
“This transaction presented a number of complexities; the assets formed part of a much larger estate, the timeframe was compressed and we had to structure a facility that would evolve with the project’s redevelopment,” he added. “We are delighted to have achieved a successful outcome and would like to commend Darren Smith, Partner at Glovers LLP, whose expertise and proactive approach were instrumental in ensuring the deal was delivered exactly on time.”
“This was a complex transaction that required a swift, solution-focused approach to meet a demanding timeline,” said Darren Smith, partner at Glovers LLP. “It was a pleasure working with the team at SHC Capital, as their precision was critical in ensuring the transaction completed successfully and on schedule.”
Why the City of London office market is attracting investors
Demand for well-located, quality office space in central London has remained resilient despite the structural shifts in working patterns that followed the pandemic. Britain’s six million small businesses continue to seek professional workspace, and larger corporates are actively pursuing modern, flexible environments that align with hybrid working models.
The City of London, in particular, has seen consistent demand from financial services, legal, and professional services firms. Vacancy rates for prime, well-specified offices remain relatively low compared with secondary stock, which has encouraged investors to target refurbishment plays that can reposition older assets for current occupier requirements.
For investors with the capital and expertise to execute refurbishments at pace, the arbitrage between acquisition cost and stabilised value continues to present a compelling opportunity.
How multi-stage bridging finance works in deals like this
Bridging finance is a short-term lending product typically used when speed and flexibility matter more than the lowest possible rate. In property investment and development, it allows buyers to move quickly on acquisitions before longer-term financing is in place.
A multi-stage or structured bridging facility takes this a step further. Rather than a single lump sum drawn at completion, the loan is designed to evolve alongside the project:
- An initial tranche funds the acquisition
- Further funds are released during the refurbishment phase, often against agreed milestones
- The facility then transitions into a stabilisation or holding loan as the asset moves toward its end state, whether that is a refinance onto a commercial mortgage or an eventual sale
This structure suits redevelopment projects where the asset’s value and income profile will change significantly over time. Lenders assess the loan against the projected end value rather than the day-one purchase price, which can allow borrowers to access more capital than a straightforward acquisition loan would provide. The loan-to-value ratio, loan term, and draw-down schedule are typically agreed upfront, with some flexibility built in for project contingencies.
Key takeaways for landlords and investors
Multi-stage bridging finance can be structured to match a project’s lifecycle, making it well-suited to acquire, refurbish, and hold strategies.
Off-market deals in prime locations often require lenders with the flexibility and speed to move on compressed timelines.
The City of London office market continues to attract capital, particularly for well-located assets capable of being repositioned for modern occupiers.
Working with specialist legal and finance teams is critical when deal structures involve multiple asset tranches, complex ownership arrangements, or tight deadlines.
For investors targeting portfolio growth, structuring finance to evolve with a project can reduce the need for costly refinancing mid-way through a redevelopment.
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