TAB lends £383,000 for Surrey care home redevelopment

TAB has provided a £383,000 bridging loan to an experienced property developer to redevelop an empty care home in Surrey.

The 12-month first-charge facility, at 65% LTV, was secured against the 6,500 sq ft building set on a half-acre site.

The site, located in Great Bookham, is in poor condition, with the grounds overgrown and the building vacant and boarded up.

The borrower plans to build six three-bedroom semi-detached houses on the site.

While the property currently benefits from Permission in Principle for residential development, his medium-term strategy is to secure full planning consent before refinancing onto a development finance facility to fund construction.

The bridging facility gives the borrower time to progress the planning process and prepare the scheme for development without requiring full planning consent at the point of acquisition finance.

The borrower has an established relationship with various development finance providers and intends to approach them once he has secured full planning consent and is ready to start work on the scheme.

TAB’s underwriting was carried out by underwriting manager Chioma Amakulo.

Sophie Meller, senior BDM for London at TAB, said: “This bridge gives the borrower, an experienced developer, the time and flexibility needed to progress a scheme through planning.

“The empty old people's home is in very poor condition and while the property may now have reached retirement age, the plot can go back to work.

“The exit strategy is to secure full planning before moving on to development finance. That has given us a clear basis on which to lend.”

Mortimer Street Capital’s Seona Patton, who introduced the deal, said: “The key requirement here was to secure finance that would allow the borrower to move forward with the site while progressing the planning position.

“TAB understood the proposition and the borrower's experience, rather than simply looking at the building itself: the retirement home’s best days were clearly behind it and it had effectively reached the end of its useful working life.

“The 12-month term provides the necessary breathing space to secure full planning consent and move towards the development finance exit.”