Pallas Capital has provided £3.9 million in development finance for a residential scheme near Market Drayton, Shropshire, covering refinancing of the completed first phase and construction funding for the second phase.
The 16-month facility is structured at just over 65% loan to gross development value (LTGDV). The second phase will bring the total scheme to eight units.
Restructured financing arrangement
The borrower, a developer and contractor with experience delivering residential schemes in the area, initially built the first phase before approaching Pallas Capital for development finance to fund the next stage. Following a valuation, Pallas Capital restructured the loan, taking the borrower’s existing residential portfolio in Stone, Staffordshire as additional security and revising solicitor and valuation instructions.
The lender also managed the handover from the borrower’s previous lender, whose facility had run over term, to avoid penalty charges. The loan completed within approximately four weeks of terms being agreed, following a broker introduction.
Regional development finance activity
Mark Witherington, senior originator at Pallas Capital, said the transaction demonstrated the firm’s approach to structuring deals that fall outside standard lending criteria. “It’s the kind of hands-on underwriting that development finance tends to need, and it’s a big part of how we’ve built our reputation with brokers and developers since launching,” he stated.
The financing comes as regional property markets experience varied conditions, with some areas seeing significant changes to residential supply. Meanwhile, consolidation activity among regional estate agencies reflects ongoing shifts in local property markets.
Units from the completed first phase are being marketed for sale while construction of the second phase proceeds under the Pallas Capital facility.
