Pallas Capital has completed a £3.9m development finance loan for a residential scheme near Market Drayton, Shropshire, refinancing the completed first phase and funding construction of the second.
The 16-month facility is structured at just over 65% loan to gross development value (LTGDV). The second phase takes the scheme to eight units in total.
The borrower is a developer and contractor who has delivered residential schemes in the local area. It built the first phase of the Shropshire site before bringing the project to Pallas Capital for development finance to fund the next stage.
Pallas Capital restructured the loan after the valuation came in, taking the borrower’s existing residential portfolio in Stone, Staffordshire as additional security and revising the solicitor and valuation instructions. It also managed the handover from the borrower’s previous lender, whose facility had run over term, to help avoid penalty charges.
The Pallas Capital team leading the deal benefited from existing relationships with the professional advisers, as the monitoring surveyor had already worked with the borrower under the former lender. The loan completed within about four weeks of terms being agreed, following a broker introduction.
“This deal is a good example of what we try to bring to every transaction: staying close to the borrower and working out a structure that fits, rather than defaulting to no when something doesn’t tick the standard box,” said Mark Witherington, senior originator at Pallas Capital (pictured).
“It’s the kind of hands-on underwriting that development finance tends to need, and it’s a big part of how we’ve built our reputation with brokers and developers since launching.”
“We’re pleased to have got the development moving into its next phase, and we look forward to continuing to support the borrower as the scheme comes to market. It’s exactly the kind of relationship we want to build more of as we grow our presence in regional development finance.”
Units from the completed first phase are being marketed for sale while Pallas Capital funds the second phase.
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