Albatross Lending Group has structured a £2,672,662 facility to refinance existing debt and fund the conversion of a vacant East London pub into a mixed-use scheme comprising six residential apartments above a fully refurbished public house.
The complex transaction combined refinance, commercial refurbishment and residential development under a single structured facility.
The security is an end-of-terrace building in the London Borough of Hackney, comprising a vacant public house on basement and ground floors with two derelict flats on upper floors, totalling 4,000 sqft.
The property already benefits from planning consent for a rear two storey extension and mansard roof allowing creation of six self-contained flats, with the facility also structured to allow refit of the commercial ground floor and basement.
The vacant pub was purchased out of receivership, requiring a lender capable of handling the transaction’s complexity under one facility.
Albatross structured a single, flexible facility covering the refinance, commercial works and residential conversion, with tranched drawdowns aligned to the development programme and interest rolled throughout.
The lender’s appointed quantity surveyor provided independent validation of costs and programme, giving all parties confidence in deliverability from day one.
The primary exit strategy involves sale of the six residential flats on completion, with combined proposed sale prices totalling £3,025,000 and average values of £500,000.
Local agents have indicated strong buyer demand and expect sales to complete within six months of marketing, while the borrower intends to refinance the commercial unit onto a commercial term product once the pub becomes operational.
The completed loan-to-gross development value stands at 55%.