Arc & Co. - Development Finance Broker of the Year

Last night in the presence of more than 700 industry professionals from leading financial institutions and trade bodies at the prestigious Royal Lancaster London hotel, the winners of the 2018 Business Moneyfacts Awards were announced.

For the second year in a row, Arc & Co. Structured Finance were presented with the Development Finance Broker of the Year award by the evening’s host, Claudia Winkleman.  Thanks to diligent research by Moneyfacts experts, companies and brokers who won, or received highly commended or commended trophies, are considered to be truly the best in class.

Each eligible organisation was scrutinised so that only those who throughout the last 12 months have consistently offered the most competitive products, the highest service levels and shown the greatest innovation in the business and commercial finance world were deemed worthy of the various trophies available.

Lee Tillcock, editor of Business Moneyfacts, said: "Another year of political uncertainty has not stopped the continuing revival in the development finance sector. The last 12 months has proven to be more profitable for many developers and as the appetite for funding grows, brokers and providers have embraced the opportunity to boost trading and growth levels.

Andrew Robinson, Chairman of Arc & Co. said: “it’s an absolute privilege to have won this award for a second year straight.  It reflects the effort, professionalism and hard work of the team over the past 12 months and we hope to be back next year with another strong submission”

Arc & Co. sponsor the first Private Client Dining event of the year

Private wealth industry professionals from London and other major financial centres are set to gather at a prestigious event hosted by the Private Client Dining (PCD) Club at The Churchill hotel in London on March 8, 2018.

 

PCD Club describes itself as the premier business networking club for international private wealth professionals around the globe, and its members include recognized industry-leading figures from the legal, banking, investment management, property and finance sectors.

Professionals in London, who advise high net worth individuals, have been invited to attend PCD Club’s dinner in the city on March 8th.  The event will be attended by professionals including lawyers, accountants, trustees, property advisors, investment managers and private bankers who advise private clients on wealth planning, trusts, retirement planning, tax, succession, investment and other key issues.

David Bell, founder of PCD Club, said: “We are delighted to be back in London next month – our London dinners are always a sell-out and we are expecting over 120 professionals at our first event in the capital this year. This event will be a great opportunity for members to make new connections and to expand their professional network and referral sources on an international basis.”

Andrew Robinson, CEO of Arc & Co, added: “Arc & Co is delighted to sponsor the first PCD Club dinner of the year. We have had a long association with the network and have derived business benefit from our membership over this period of time. Sponsorship enables us to amplify our message to a large audience of professionals in a very targeted and efficient way.”

The beginning of March and another new team member

Tom savill (1).jpg

Following the arrival of Jeremy in January we are pushing ahead with our plans for growth and skills diversity with the addition of Tom Savill to the Structured and Development team.

Tom joins Arc & Co. having spent the past 6 months on our training program. Tom gained a Bachelor’s degree in business from the university of Oxford Brookes and uses the valuable skills gained from past experiences to aid and enhance the Commercial and Development team.

Arc&Co. successfully advise on the finance of 50 meter Codecasa

Leon Batchelor, Managing Director of Arc & Co. Marine and Aviation has sucessfully adviced on the finance on a 50 meter Codecasa Yacht on behalf of a Middle Eastern Client.

Please see below for details:

Client: Middle Eastern
Yacht: 50 meter Codecasa
Loan to value: 50%
Term: 5 Years
Structure: 'pure' yacht mortgage without private banking

Photo credit: Codecasa Shipyards

Codecasa Shipyards, established in Viareggio back in 1825 by the shipwright Giovanni Battista Codecasa, are an absolutely prominent reality in the luxury yachting industry and are known all over the world as builders of steel and light alloy motoryachts, ranging from 30 to 70 meters LOA.

Still run by the founder’s heirs, nowadays the Codecasa Shipyards Group is able to offer a wide range of Yachts, featured by top quality, technologic innovation, reliability, design and comfort.

Lending Focus Seminar

It’s always a privilege when a team member is called upon to give his opinion on the finance market.  Taylor Wessing’s ‘Lending Focus’ series of seminars has experts from across the Taylor Wessing network presenting on a range of hot topics and market updates.  This week saw Edward Horn-Smith as the guest speaker giving a presentation entitled ‘Trends, Terms and Tensions for the mezzanine finance market’ at Taylor Wessing’s New Street Square offices in London.

Starting 2018 with continued growth

The start of 2018 is proving to be as busy as the end of 2017.  In addition to the many smaller deals that have completed this month, the £11.3 m loan for a large redevelopment in Reading is a great way to start the new year.  As we look forward to the year ahead we welcome Jeremy to the Arc & Co. team.  Jeremy is the first of several new hires that will take place as we look to not only grow the team but also to expand the skills and experience within the company.

Jeremy is a highly accomplished property lending professional with direct corporate acquisition and ownership experience over a 28 year career including spells with lenders UCB Bank Plc (a then Paribas subsidiary) and PLT Ltd. Success in residential property development and commercial investments as both owner and lender give him the expertise and understanding to provide the outstanding level of advice and service that clients require in today’s marketplace.

Arc & Co. advise Allies Group on £11 million of funding

Arc & Co. has successfully advised the developer Allies Group, on the acquisition and construction finance for the Clarendon House site in central Reading. The project has planning consent for a permitted development scheme of forty-nine self-contained apartments which will form part of major works on phase 1. Planning for phases 2 and 3 are currently being submitted and this will see the scheme grow to circa one hundred residential apartments.  The design will make it an exemplary addition to the fast-growing Reading town.

To assist with the purchase and development, Arc & Co. structured a facility in excess of £11 million with the opportunity for further funding when the planning consent is approved for phases 2 and 3.

Charlie Armstrong said: “Arc & Co. are delighted to have worked alongside Allies Group to structure the debt for this project and to bring forward a scheme that will no doubt be a fantastic addition to the housing stock in central Reading”.

Mario Luca Balducci, Chairman of Allies Group said: “Arc & Co. understood our business model exceptionally well and provided quick, efficient and effective solutions which were beyond typical structured finance arrangements”.

Jimmy Baillie joins Arc & Co.

It’s with pleasure I announce Jimmy Baillie as a further addition to the Arc & Co. team.

Having completed a Postgraduate Degree in Economics from the University of Cape Town, Jimmy spent 3 years living in the US before moving to London in 2013.  Starting out at a multi-family office in Mayfair, Jimmy worked as a Relationship Manager to high net worth clients across the UK, Europe, Middle East and South Africa.

Here, he moved on to become the sole financier within the firm, raising everything from residential and commercial finance to development and bridging loans whilst continuing his wealth management role to its HNW clientele.

Jimmy has a true international background, having raised finance in various jurisdictions from the UK and Western Europe, to West Africa, Southern Africa and Australia.

Now part of the Arc & Co. team Jimmy will continue to focus on HNW UK and international clients advising on residential, marine and aviation assets.

 

Jimmy_Baillie.jpg

Jimmy Baillie
Arc&Co.
30 St George Street,
London
W1S 2FH

Office: +44 (0) 207 647 9741
Mob: +44 (0) 744 616 4535
Email: jimmy@arcandco.com 
www.arcandco.com

Review of 2017 and the year ahead

2017 is coming to a close and despite a troublesome financial market, Arc & Co. have had another successful year. As a team we have organised and structured over £450m of loans.

Although the headlines suggest a volatile market, there has been an increase in the amount of liquidity available and the majority of funders are still keen to deploy money into both development and investment transactions.

We have arranged 70 loans across the capital stack throughout the year, ranging from a 17.5% LTV investment facility on a central London property, up to 95% LTC/75% LTGDV on large residential developments.

Please find below a list of products we put in place throughout 2017:

·         Development & conversion loans throughout the capital stack

·         Bridge loans to purchase

·         Bridge loans to purchase, rolled into development facilities

·         Development exit bridges

·         Investment loans for purchase or refinance (in many cases releasing capital for re-investment)

·         Bridge to purchase and stabilise, rolled into long-term investment money

In 2018 we hope to do much of the same using our expertise in structuring real estate loans for all areas of the market.  If you have any transactions in the pipeline for 2018 that you would like to discuss, please make contact.

Nick Holding-Parsons

Nick is a professional debt advisor specialising in structured asset finance for UK and international clients. In the time Arc & Co. has been running, it has built strong relationships with a wide range of different funding lines to suit our clients' specific property transactions, whether it be development or investment projects. Unlike your typical advisor/broker, we do a great deal of underwriting in-house which means we can quickly find the best solution for our clients.

Tel: +44 (0) 20 3205 2129
Mobile: +44 (0) 79 7350 632
Email: nick@arcandco.com

Market Update

Up until the last recession, developers would normally structure their debt with traditional Senior banks like Natwest, and if they needed higher leverage they would add mezzanine finance to sit behind the senior loan.

Since 2008, the traditional senior lenders have either retrenched from the market or become a lot more conservative on allowing the developer to structure mezzanine behind them. This has resulted in the emergence of new lenders who have the ability to provide whole loans, or ‘stretched facilities’.

These funders, who typically have mandates from institutional funds or family offices, have now gained a sizable market share and are becoming the market norm. These lenders will lend up to 90% of total cost at a rate of around 10-12%. If you compare that to the traditional method and calculate the blended rate of the senior loan, usually at 6% and the mezzanine loan at 16%, the blended rate is in the single digits.

We can clearly see that the market is now swinging back in favour of the traditional way of structuring and as the market becomes more competitive, rate compression is likely to
happen. On top of this, the market is seeing more willingness from senior lenders to accept mezzanine to sit behind them.

The most important part of the deal is not always the price; it is about completing the deal in a timely and cost-sensitive manner. Traditional structuring does throw in other problems that you should consider. Inter-credit deeds must be negotiated and agreed between the senior and mezzanine lenders, and on top of this your professional fees, such as for lawyers and surveyors, will be a lot higher due to two lenders being involved.

A development project very rarely runs on time. If a time extension is needed, the developer will have to negotiate with two lending parties rather than having one port of call.

To summarise, it is a positive sign that the market is seeing increased growth in development lenders and it is great to see that the traditional method of structuring debt deals is returning and expanding. Stretched lending is a good way to simplify a deal and save on fees, but most of the time will not be as cheap.

For developers, any increase in financing options available is always a positive sign, but as the market expands for both stretched and traditional financing there will be more emphasis on the broker and their quality of advice. If advised correctly, the developer can maximise their financial return by using the traditional method.