Actively funding the development sector
In the latest in our series highlighting the services, skills and expertise available from our wide range of associate members, Stuart Anthony (right) of Close Property Finance (CPF), the property lending business of merchant bank Close Bothers Group PLC, demonstrates how some companies are actively funding the development sector.
“Since CPF’s Scottish office opened in Edinburgh in January 2009, we have seen a good level of funding proposals, many of which still make sense to back despite the difficult economic conditions.
“In fact, we have already funded more than 30 projects across the whole of Scotland, largely residential development schemes and, whilst the mortgage market remains challenging, we are seeing housing schemes in established, sought after locations which are correctly priced achieving a good level of sales.
“Examples of projects funded to date include a new build apartment scheme in North Berwick, residential conversion projects in the West End of Glasgow, a landmark office into residential scheme on the Mound in Edinburgh as well as schemes in Perthshire, Aberdeen and Inverness. Commercial funding is also available on a pre-let basis with a number of retail parades being funded too.
“Typically we are dealing with private property companies who have the relevant experience, remain financially sound and with a project which still makes sense to build out. Clearly, house builders have faced a very tough couple of years but, whilst there remains a level of uncertainty to the wider economy, there are still good opportunities out there”.
“With a continuing lack of appetite from the high street banks to support house builders, this dearth of finance has provided opportunities for CPF which also recently funded the acquisition of the former Royal Mail Sorting office in Edinburgh - a 4 acre site off Leith Walk. Whilst still to go through the planning process, this site will ultimately represent a dense mixed use scheme which already has attracted the attention of national builders.
“It would be fair to say we are the type of bank who only takes on risk it understands, so in the good times we haven’t made as much money but in the bad times we are still profitable and very much open for business”.
Close Brothers is the UK’s largest listed independent merchant bank with a market cap in excess of £1bn and has been a consistent lender during the downturn across its target markets.
For further information or to discuss a proposal, please contact Stuart Anthony on 0131 220 9331 or via email at santhony@closebrothers.co.uk.
NB: Any associate members wishing to find out more about our “Spotlight on ...” feature should contact Jennifer Kennedy at the Homes for Scotland office.