Specialist property lender Octopus Property will provide FRT Developments specialists in asset regeneration, with a £10.7m development loan to deliver 51 homes in Isleworth, West London.
Planning consent has been secured to convert the former office building into 42 one, two and three bed apartments, with an average sale price of £340,000, along with nine affordable units, arranged over four floors.
The 27-month loan, secured at 66% loan-to-gross development value, will support delivery of the scheme targeting H2 2019.
Gavin Eustace, head of residential development at Octopus Property, said: “This deal, with one of the most exciting residential developers in the South East, is a great example of how different parts of the Octopus Property business are able to work together to seamlessly provide borrowers with bespoke financing at different stages of the real estate lifecycle.
“With favorable macro conditions including low interest rates, supportive government initiatives such as Help to Buy and a significant shortage of good quality, affordably priced homes in the South East, this is exactly the type of liquid scheme that we expect to be financing more and more through the rest of 2018.
“Our development team has delivered a period of record growth in the last 12 months, and whilst more traditional forms of financing remain unavailable, we are well-placed to build on this success.”
Richard Rawlings, at FRT Developments, added: “We are delighted to have secured lending from Octopus Property, whose practical and flexible approach has enabled us to enhance the planning permission, increasing the size of the scheme from 28 to 51 residential units.
“We look forward to working with Octopus Property through the development phase and delivering affordable starter homes in H2 2019, with deposits as low as £15,000, via London Help to Buy.
“FRT Developments continues to acquire more sites to provide homes to the London and South-East catchments.”
Demonstrating the benefits of Octopus Property’s unique lifecycle lending proposition, FRT was able to roll from a £3.27m commercial bridging loan.
This was provided by Octopus Property’s commercial team in January for the acquisition of the site, onto the £10.7m development facility, eliminating the duplication of reporting, underwriting and arrangement fees and saving the borrower time and money.
Located on St John’s Road, the building is a short walk from Isleworth train station, which offers fast access into Central London and is adjacent to one of West London’s largest parks; the Royal Botanical Gardens.