Pallas Capital has completed a £970,000 development exit loan for a residential scheme in Kibworth, Leicestershire, within a five-week timeframe. The 12-month bridging facility refinances an existing development facility and provides funding for the marketing phase of four units within a 10-unit project.
The loan, structured at 75% loan-to-value, covers two bungalows and two apartments delivered by a developer with existing experience in the local residential market. The transaction required specific security arrangements that ringfenced four units within the wider scheme, rather than placing a charge over the entire development.
Technical structure
Senior originator Mark Witherington and underwriter Christopher Adams handled the transaction for Pallas Capital, with Andrew German at Glovers representing the lender. The deal required the lender to work through technical complexities to isolate the four specific units from the broader scheme security.
“This deal is a great example of what can be achieved when maintaining an open dialogue throughout the underwriting process,” said Christopher Adams, underwriter at Pallas Capital. “Despite the compressed timeline, we were able to address the more complex aspects of the security structure to meet the client’s requirements.”
Financing trends
The completion represents an ongoing relationship between the lender and borrower, with both parties now exploring additional sites. The structure demonstrates an approach to development finance that allows developers to separate completed units from ongoing construction phases.
The bridging loan sector continues to provide short-term financing solutions for developers navigating refinancing requirements, particularly as business rates increases affect property sector costs. Development exit finance typically bridges the gap between construction completion and permanent financing or unit sales.
The Leicestershire market has seen continued residential development activity, with schemes ranging from small infill projects to larger multi-unit developments. The ability to ringfence individual units within schemes provides developers with flexibility in managing cash flow and sales strategies across phased completions.