At a glance
GRE Capital agreed a 12 month senior loan of £5.72m, secured by a first charge over a vacant 1970s office building of 47,512 sq ft at Capital Gate, 320 New North Road. The business plan is to obtain full planning to demolish the existing building and deliver about 42 townhouses and an affordable block of 32 flats. The site is designated as an opportunity site in the Redbridge Local Plan with a strong permitted development fall back to convert to residential flats.
The brief
The borrower, Medina Capital Investments, exchanged to buy the freehold for £6.0m and required certainty of funding while pursuing planning. The site benefits from excellent transport links with Hainault Underground Station 0.3 miles away and strong road connectivity to the M11, M25, A12 and North Circular. Equity support included Pathway Homes with experienced planning input from a specialist adviser.
The GRE solution
GRE Capital provided a tailored 12 month senior facility with retained interest to support the acquisition and the planning timetable. Conditions included a Red Book valuation at £6.0m, satisfactory planning advice and standard due diligence. Our structure recognised both the positive pre application feedback and the permitted development alternative which would still allow repayment of the facility.
The outcome
The facility enabled acquisition and a clear pathway to planning. On the full planning case the residual land value indicates coverage of the GRE loan in the region of 1.80 times, with the permitted development case indicating around 1.62 times coverage. Our conviction in the planning potential and the downside protection meant we could lend where others might not.
