Mortimer Street Capital has structured £7.1m of development exit finance with Recognise Bank for a residential scheme just south of Bristol.
The facility is secured over seven completed homes, four of them sold subject to contract, and two further plots at damp-proof course stage. The development exit finance redeemed the developer’s existing development finance facility and released capital for further site acquisitions, so the borrower can move onto its next schemes without waiting for the remaining sales to complete.
The homes include smart home technology. Each carries a Zero Bills guarantee for ten years under the Octopus Energy Zero Bills initiative, which gives purchasers certainty over energy costs for a decade from completion.
“Orchestrating funding for a mid-sized developer is a moving feast,” said Justin Trowse, managing director of Mortimer Street Capital.
“Sales positions shift, programmes move, and the next site rarely waits. Developers are not short of offers, and headline pricing is the easiest part of the conversation. The harder part is getting a deal done and finding a partner who understands the sponsor’s requirement and can keep pace with it. Heather and the wider Recognise team acted swiftly and effectively throughout, and the result is a facility that clears the existing debt and puts capital back to work.”
“Every development has its own circumstances, and it is important that lenders are prepared to assess each case on its individual merits,” noted Heather Mitchell, business development manager at Recognise Bank.
“This transaction demonstrates how taking a practical, considered approach can help us support developers whose funding requirements may not fit neatly within standard lending criteria.
“Working closely with Justin and the team at Mortimer Street Capital, we were able to agree on a facility at 80% LTV that gave the developer the flexibility to move forward with its next projects. It is a good example of how commercial judgement and a clear understanding of the borrower’s objectives can help deliver the right outcome.”
Trowse led the development exit finance transaction for Mortimer Street Capital. Mitchell acted for Recognise Bank, and Numan Sultan acted on the bank’s legal side.
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