Case Study: Arc & Co. secure funding for £2.4 million residential development site

Client: Joint venture between Leading Homes and Muniment Ltd

Requirement: Arc & Co. have secured funding for a £2.4 million phased residential development scheme in Totnes, Devon, on behalf of the joint venture clients. There were a number of moving parts which required detailed planning and close attention to obtain the optimum financial solution for the build of the initial 26 units.

Solution: Funding was successfully secured at 60% Loan-to-Gross Development Value. Two factors which added a little more complexity to the process, included the clients being located in different time zones and the development site being in an area that not all lenders have been regularly exposed to. Ian Walmsley, Director of Leading Homes, concluded on working with Arc & Co.: “We enjoy working with quality partners and Sam has proved to be one. Trevor and I are always looking for new opportunities and having someone like Sam to act swiftly on new deals is vital for both us and our investors.”

Details of the project can be found at http://totnesproperty.com.

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Contact: 
Sam Le Pard
Arc & Co. Structured Finance   

T: +44 (0)20 3205 2195 
E: sam@arcandco.com

Judd Cole Joins Arc & Co.

Arc & Co. strengthens their Private Finance team with the addition of Judd Cole. Judd will head up Arc & Co.’s operations for Southern Europe, where he provides debt advisory on Real Estate, Marine and Aviation.

Judd has worked in the international financial markets for the past 20 years. He previously worked as a Propriety Trader in Paris, and as a Bay Street Investment Advisor in Toronto,  working closely with TD Wealth and RBC Dominion Securities. Judd has extensive investment banking knowledge and a vast global network with a deep grasp of structured finance. He lives with his family in the Monaco area.

Andrew Robinson, Arc & Co. CEO, said of the addition ‘it’s a privilege to grow the team with someone who has the vast market experience such as Judd. He brings a perfect mix of experience and knowledge with private wealth clients paired with Arc & Co.’s debt advisory it will provide real substance to our platform’.

To get in touch with Judd, please find his contact details below:

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Judd Cole

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


Tel: +44 (0) 203 971 2512 (UK)
Mob: :+33 (6) 29 86 36 09 (France)
Email: judd@arcandco.com

www.arcandco.com

Case Study: Arc & Co. secure 50% LTV deal for UK Resident Non Domicile client

Client: Private Lebanese individual

Requirement: Our client – UK Resident Non Domicile – was looking for maximum loan-to-value (LTV) on a dry lending basis for a property in Westminster, for his personal use. The property was valued at £18 million. This deal presented a number of potential hurdles, which Arc & Co. were able to work around. The first being that the client had been retaining the majority of his income within a UK business and the second being that the client had a large amount of overseas income which was not being remitted into the UK.

Solution: We were able to secure a loan of £9 million (50% LTV), which was a notable achievement when properties at this value tend to get down valued. Arc & Co. undertook extensive research prior to the valuation stage and gathered comparable evidence to support the indicative property value. The margin was 1.85% over 3 month libor for a 5 year interest only term.

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Contact: 
Daire Dowling
Managing Director
Arc & Co. Private Finance   

T: +44 (0)20 3205 2196 
E: daire@arcandco.com

Case Study: Arc & Co. secure buy-to-let mortgage for Kazakhstan client

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Contact: 
Nikita Nigai
Asset Finance Advisor
Arc & Co. Private Finance   

T: +44 (0)20 3205 2122   
E: nikita@arcandco.com

Client: Private employed individual from Kazakhstan

Requirement: Arc & Co worked on behalf of this private individual to obtain a buy-to-let mortgage for a new build flat in London with a value of £875,000. This was a complex deal due to the personal circumstances of the individual and him not having clear proof of income.

Solution: A loan of £596,800 was secured and with a loan-to-value ratio of 68%. This was at a rate of 0.9% per month and for a 12-month period. We also negotiated rolled up interest for the first 3 months, with no ERC (after the first 3 months) and the arrangement fee added to the gross loan amount.

News: Arc & Co. complete prime residential finance deals in London

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Mayfair-based specialist debt advisor Arc & Co., has recently completed £70 million of loans for the refinancing of 3 prime residential London assets. The loans have a maximum loan-to-value (LTV) ratio of 65% and were all completed in the last month of 2018.

The loans provided refinancing for three development sites in Holland Park, St Johns Wood and Hampstead. The sites comprise a single development unit with a red book value of £50 million, a further single unit with a red book value of £34 million and a multi-unit development site comprising 31 apartments and 4 townhouses, with a red book value of £34 million and aimed at investors and individuals looking to downsize.

The London prime residential property market has been in decline since 2014 with very few lenders supporting the high value market.

To read the full release, please click here

There has been a slight reverse in funding of prime residential property in the last 6 months, with new funding lines now available to developers. Following years of funding restrictions in the prime residential market, investors are now seeing the relative value and taking a longer-term view.

Over the past 3-4 years, it has been incredibly hard to finance central London development sites and these loans and the LTV ratios achieved, show that there is still liquidity available for the right projects and best sponsors.
— Edward Horn-Smith, Arc & Co.

Contact:

Edward Horn-Smith, Managing Director, Structured Finance - Arc & Co.

T: +44 (0) 20 3205 2126 E: edward@arcandco.com

News: Arc & Co. advise on £45 million blended debt facility to secure funding for EREC Estates Ltd 502-bed Purpose Built Student Accommodation development site in Coventry

  • Octopus Property’s largest ever development loan of £36 million 

  • Third Purpose Built Student Accommodation deal with developer EREC Estates Ltd

  • Both Coventry and Warwick universities facing a significant bed shortage

The Scheme

London, 7 February 2019 - Specialist property lender Octopus Property, part of the Octopus Group, has agreed to provide EREC Estates Ltd, an experienced UK developer of student accommodation, with a £36 million senior loan for the development of a major Purpose Built Student Accommodation (“PBSA”) scheme in Coventry. The scheme was brought to Octopus Property by John Kerrigan – Director at Arc & Co., who advised EREC Estates Ltd on the debt structure, which also included a £9.2m mezzanine loan.  This loan represents the largest ever development deal completed by the team within Octopus Property.

Arc & Co.’s John Kerrigan

Arc & Co.’s John Kerrigan

To read the full release, please click here

Contact:

John Kerrigan, Director, Structured Finance - Arc & Co. T: +44 (0) 20 3205 2124 E: john@arcandco.com


In the Press:

Property Week:

In the Press:

Europe Real Estate:

Case Study: Arc & Co secure buy-to-let mortgage on complex deal

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Contact: 
Nikita Nigai
Asset Finance Advisor
Arc & Co. Private Finance   

T: +44 (0)20 3205 2122   
E: nikita@arcandco.com

Client: Private employed individual from Kazakhstan

Requirement: Arc & Co. worked on behalf of this private individual to obtain a buy-to-let mortgage for a 1-bedroom new build flat in London and with a value of £825,000. This was a complex deal due to the personal circumstances of the individual and him not having clear proof of income.

Solution: A loan of £457,875 was secured and with a loan-to-value ratio of 55%. This was at a total annual rate of 7.49%, with 2% of this deferred and added to the gross loan amount, therefore achieving an annual rate of 5.49% over a 36-month term. Interest is serviced on a monthly basis and the arrangement fee was added to the gross loan amount.

Let to Buy Chain Breaker

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We have recently advised on a deal that has allowed a client to retain their current home and take money out of that house, to allow them to purchase a new main residence. In the 2010 – 2012 recession we saw many of these transactions, as people struggled to sell their homes, and now as the market is showing signs of another dip, this solution is more common once again.

So how does this work? In this instance my client’s current was valued at £500,000 and he had a mortgage of £268,000 remaining. We were able to arrange a mortgage of £375,000 (75% LTV) on this property, thereby releasing £107,000. The rent was assessed at £1,750 per month, which was well below the level required. However the lender we approached allowed an element of “top slicing”, whereby we could use the client’s earned income to top up the rent.

This is called a Let to Buy, as the client is letting their current home to purchase a new main residence. This is different to a Buy to Let, where the client is buying a new property with the sole intention of letting it out. Because they are not selling their current home, they would have to pay the stamp surcharge of 3% on their new purchase; but if they sell the let house within three years then they can reclaim this.

The onward purchase price was £700,000, and we arranged a mortgage of £530,000 with a lender who was happy with the Let to Buy in the background. That lender understood that the current house was to be let out, but there was no track history of rental income. They were satisfied with a letter from a local letting agent confirming the level of rent that could be expected.

This allowed the clients to be in control of their chain from day one, which subsequently allowed them to negotiate a better deal on their new home. We arranged a two year fixed on their Let to Buy, so if they decide to sell the let property they can reclaim the extra stamp duty that they have paid; and if they want it keep it then they have increased their wealth and aided their pension planning.

If you are in the above situation then feel free to contact Alistair.

Alistair Hargreaves
Financial Consultant
Arc & Co.
30 St George Street, London, W1S 2FH
Office: +44 (0) 203 205 2129
Mobile: +44 (0) 796 750 9318
Email: alistair@arcandco.com

Arc & Co. Secures Agricultural Mortgage for Land Purchase

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Contact: 
Jamie Rigby
Financial Consultant
Arc & Co.   

T: +44 (0) 1295 793 1701
E: jamie@arcandco.com

Client:  Well-respected and successful farming enterprise 

Requirement:  The client approached their long-term agricultural lender to help purchase a neighbouring farm, they needed a quick approval in order to beat competing bidders. Unfortunately, after weeks of deliberation and with only three working days until bidding deadline, the bank informed their loyal client that they would not be able to assist. 

Solution:  Jamie Rigby, Financial Consultant at Arc & Co., was asked to step in and find an alternative within the short time frame. “I met with the clients over the weekend, and quickly established that their business was a sound one with strong financials”, Jamie explains. “The rationale for the purchase was good, and to me made complete sense. With only a few days grace, I knew I had to act quickly to give my client the best chance of a successful bid”. The following Monday, Jamie spoke with alternative lenders and quickly arranged a credit-backed 5-year loan with a reputable challenger bank, allowing the client to be in the strongest position possible to bid on the new farm.

“With a credit-backed bid, the client’s bid was accepted and we completed the purchase a few weeks later. What was equally gratifying”, Jamie says, “is that we managed to improve upon the rate suggested by the client’s long-term lender”. Jamie secured his client with a £2m agricultural loan on an Interest Only basis for a period of 5 years, at a margin of 2% over Bank of England Base Rate.