Market Financial Solutions (MFS) has completed a £6.6 million bridging loan to enable a client to purchase a shopping centre in the North West of England.
A broker and client that MFS had provided a loan to earlier this year returned requiring fast finance for the large commercial asset in Greater Manchester. The client was also completing the purchase via a private company.
The shopping centre was a mix of tenanted units, some of which were vacant. The commercial property was larger than the previous asset MFS had enabled the same client to purchase.
However, MFS knew the client history of purchasing such properties, as well as their capability and credibility when investing in shopping centres. While some of vacant units may have discouraged other lenders, MFS trusted the broker and borrower based on their expertise within this field.
MFS had to navigate many legal complexities, with its underwriter needing to assess the leases and agreements of the current units. In the process of doing so, the lender uncovered that the largest unit on the ground floor had a longstanding lease until 2070, and while that tenant had seen their trading slow down of late, the client informed MFS that a potential buyout was on the table.
There were also minor concerns over the age and condition of the property. MFS called upon its diverse valuation panel, allowing it to find a valuer that had previous experience with these types of commercial properties. When MFS received the valuation report, the company was comfortable that the asset remained a low risk, boosted by the fact it had recently undergone a thorough refurbishment.
The first-charge loan totalled £6.6 million at an LTV of 60%, with a provisional exit strategy through long-term refinancing. It is one of many examples from 2021 where MFS has delivered a large, multi-million-pound bridging facility, with the lender underlining its expertise in handling such cases at speed.
Paresh Raja, CEO of MFS, said: “This is the latest in an increasingly long line of bridging loans that we have provided to clients purchasing commercial assets – indeed, it is the third loan issued to this client in 2021, all of which were used to purchase shopping centres. Such properties present unique challenges, and these cases underline MFS’ various skills in handling complex situations.
“Crucially, we take into account a client’s skill and track-record. This client, for example, has been successful when investing in many other shopping centres, so we knew they were commercially savvy. We also have the expertise within our underwriting team and valuation panel to overcome potential obstacles that arise along the way. All of this ensures a fast loan and high-quality service, which is why so many brokers and clients return to MFS time and time again.”
Read the case study here.