City office secures £47.2m refurbishment finance
A 58,000 sq ft office building in the City of London has secured £47.2 million in refurbishment finance from a specialist debt fund, arranged by finance broker FRP.
The facility refinances the owner’s acquisition bridge loan and funds a capital expenditure programme targeting BREEAM Excellent certification. The works include a full internal refurbishment and construction of an additional top floor, for which planning consent was obtained after acquisition.
Finance structure
The refurbishment finance was structured at 78% loan to cost (LTC) and 65% loan to gross development value (LTGDV). The margin is set to reduce once the building achieves full occupancy.
FRP partner Edward Horn-Smith and director Philip Kay led the transaction, marking the third deal between FRP and this client. The refinance tranche drew down within five weeks of credit approval, with development tranche elements following.
The deal represents another example of specialist lending completing at pace, similar to recent trends in the bridging finance sector.
Development strategy
Upon completion of works, the developer intends to pursue either an owner-occupier or single-let strategy, with multi-let as an alternative option. Lease marketing will commence once on-site works begin.
Kay said: “This is a client we know well, and the brief was clear: refinance at pace and fund the capex without losing momentum. We partnered with a provider which took a commercial approach to the more complex points, particularly relating to the top floor addition.”
The transaction follows other recent commercial property financing deals, including retail portfolio financing in South London, as lenders maintain appetite for commercial property development despite broader market headwinds.
Market context
The financing comes as the commercial property sector navigates changing market conditions, with development finance providers continuing to support office refurbishment projects in core London locations. The emphasis on BREEAM Excellent certification reflects growing investor and occupier demand for sustainable office space.
