Fiduciam provided a £25 million committed portfolio acquisition facility to a property investor over the festive period.
The £25 million facility supports the investor’s property acquisition plans for the first half of 2023 and beyond, which involve the creation of a large new cross border portfolio. The committed facility provides the investor with funding and liquidity certainty, putting the investor in an optimal position as acquisition opportunities arise.
With a comprehensive set of pre-agreed property selection criteria in place, the facility is entirely mechanical. As long as the property meets the pre-agreed criteria, the investor is guaranteed funding. For each property purchase a considerably faster drawdown can also be achieved as terms have been agreed in advance as part of the portfolio facility.
The facility envisions commitment increases beyond the initial £25 million as acquisition opportunities require. Properties can be purchased in the UK, Spain and France with individual sterling or euro loans under the facility.
Over the five-year facility term, property acquisition loans can be provided at up to 70% loan to value at interest rates from 0.73%, depending on property location and the level of the 1-year swap rate. The extended term of the facility offers the investor maximum flexibility to both optimise and spread the timing of their acquisitions and allows sufficient time to achieve an exit.
Fiduciam expects to complete more committed portfolio facilities over the coming six months as property investors prepare to seize opportunities created by market turbulence by first obtaining secure fast turnaround funding.
Marc Morris, senior underwriter (UK) at Fiduciam, said: “Fiduciam has provided the borrower with a flexible £25m committed facility to support the acquisition of a new cross border property portfolio that will cover the UK, Spain and France. Utilisation requests can be made as soon as a target property is identified, with the acquisition loan disbursed on receipt of the valuation. A commitment increase request can be made under the facility if an opportunity requires.”
Valeria Quintana, senior underwriter (Spain) at Fiduciam, added: “This type of portfolio facility will be attractive to investors who want to be fully prepared to take advantage of the market opportunities that will arise over the next year or so. It effectively allows them to operate as cash buyers, with a strong negotiating position and an ability to strike fast. It combines funding certainty with a high degree of acquisition flexibility, allowing the investor to be very opportunistic.”
Johan Groothaert (pictured), CEO at Fiduciam, concluded: “Turbulence in the property and lending markets will be major themes of 2023. Therefore, we expect to sign up a number of top-performing property investors to our committed portfolio facility solution over the next few months, allowing them to acquire multiple properties during the market sell-off with pre-agreed funding criteria. As always, every downturn also brings opportunities, and we are eager to assist with an innovative committed facility solution.”
