£2.9m loan to convert derelict hospital to 30 flats

Project Background:

An experienced property investor wanted to convert a disused hospital in Darlington into 30 modern flats. Already owning the property, the client needed a £2.9 million loan to finance the refurbishment. The development was projected to deliver a Gross Development Value (GDV) of £5.5 million upon completion.

Challenge:

The main challenge, in this case, was the significant financial requirement for the extensive conversion project. The client needed a loan that aligned with their project timeline and GDV to ensure seamless execution. Additionally, managing cash flow efficiently during the construction phase was critical for the project’s success.

Solution:

To address the challenge, we provided the property investor with a £2.9 million loan at a monthly interest rate of 0.7%. By releasing the funds in stages, we are facilitating smoother project progress and minimising financial strain during construction.

Outcome:

Construction has officially begun on the disused hospital. Once the 30 high-quality flats are completed, the gross-development value is projected to sit at £5.5 million. The client will be selling a number of the units to exit the loan while retaining some to grant them a steady rental income and ongoing capital growth.