Gross loan £2,672,662 · 12-month term · GDV £4,300,000 · 55% LTGDV
Albatross Lending Group recently structured a gross facility of £2,672,662 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, operational public house. This was a complex, multi-layered transaction, combining a refinance, a commercial refurbishment, and a residential development into a single structured facility.
The security is an end-of-terrace building in the London Borough of Hackney. The property comprises a vacant public house on the basement and ground floors with the upper floors forming two derelict flats, totalling 4,000 sqft., The property already benefited from planning consent for a rear two storey extension and mansard roof allowing the creation of six self-contained flats. The development facility was also structured to allow the refit of the commercial ground floor and basement, bringing it back to an operational standard.
This was a complex deal, with the security forming a vacant pub purchased out of receivership, the scheme involved both a commercial refurbishment and a residential development, and the borrower needed a lender who could hold the complexity of the transaction together under one facility. Albatross was able to structure a single, flexible facility covering the refinance, the commercial works, and the residential conversion, with tranched drawdowns aligned to the development programme and interest rolled throughout. Our appointed quantity surveyor provided independent validation of the costs and programme, giving all parties confidence in the deliverability of the scheme from day one. With a completed LTGDV of 55% and a clear dual exit via flat sales and commercial refinance, Albatross was well positioned to back a strong borrower on a deal that others might have found difficult to structure.
The primary exit is the sale of the six residential flats on completion, with combined proposed sale prices totalling £3,025,000 with an average value of £500,000. Local agents have indicated strong buyer demand and expect sales to complete within six months of marketing. In parallel, the borrower intends to refinance the commercial unit onto a commercial term product once the pub is operational.