The site was originally bought with the help of another lender in January 2020; at the time, it consisted of an office building with a ground-floor restaurant/bar. At the point of purchase, there were two existing consents attached. The first was approved in July 2018, allowing the first two floors to be converted into twenty-nine studio and 1-bedroom flats under permitted development rights. The second consent of October 2019 allowed the borrower to construct a vertical extension, creating a further nine flats.
Following the purchase, the borrower ran into delays in construction, suffering from the impacts of both Brexit and the COVID-19 pandemic. Issues were further compounded with the main contractor performing poorly which led to a recalibration of the professional team including the appointment of an experienced project manager to work alongside the borrower and helping regain some of the momentum lost on site.
Following this period, it became clear that although the developer had made significant progress as the PDR units were near practical completion and the vertical extension was wind and watertight, the existing development facility, out with another lender, did not allow sufficient time for the borrower to complete the build and exit the project.
Using their Part Complete Development product, Avamore Capital was able to refinance the existing debt, provide the borrower a Day 1 equity release for working capital and fund 100% of the remaining works so that there were no more cashflow-related delays to the final construction elements.
Avamore issued a 12-month loan providing the borrower with peace of mind that they had time to complete the units and exit at the right price.