An 18 Month Commercial Property Refinance in Swansea

Background

A client approached Ramsay & White looking to purchase a large commercial property in Swansea measuring over 80,000 sq ft. The acquisition was funded through a combination of private finance, pension funds and business partner capital. However, there were two key issues that made the deal more complex. The main tenant occupying one of the units had a lease that was close to expiry, and one of the ground floor units in the building was vacant. Both of these factors made lenders cautious about providing long-term finance at the outset.

The Strategy

Rather than rushing the transaction, a longer-term approach was taken. The focus was on strengthening the overall position of the property so that it would become more attractive to lenders when the time came to refinance. This meant allowing time for the tenancy situation within the building to improve before securing long-term funding.

What Happened Next

Over the following 18 months, several important developments took place:

• The main tenant agreed a longer lease
• The previously vacant ground floor unit was successfully let
• A £1 million lending facility was agreed
• A Local Authority loan was secured at a preferential rate

With these improvements in place, the overall risk profile of the property reduced significantly.
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The Outcome

Once the tenancy position had stabilised and the funding structure was in place, the property was successfully refinanced. The new structure improved the project’s cashflow and allowed the borrowing to be reorganised in a way that supported the client’s longer-term plans. With the refinance complete, the next phase of development for the building can now move forward.

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Need Support With Commercial Property Finance?

If you are purchasing commercial property, restructuring existing borrowing, or planning a refinance strategy, the Ramsay & White team can help structure the right finance solution for your project.

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