Octane Capital has completed a £10m bridging loan on a £20m asset to a client of First Wealth Management within 12 days of the initial enquiry.
This time frame included a new valuation and full legal due diligence on the asset and borrower, who urgently needed to raise equity to fund another acquisition. Part of the loan provided by Octane Capital was to take out another bridging lender, with an additional £4m of equity provided on top.
The security was a £20m loft-style studio development in a former Victorian warehouse in Hackney, which was purchased vacant in 2014. During the past three years the borrower has implemented a successful value-add asset management strategy, achieving 100% occupancy and driving rental performance across the estate.
The key asset has become an established creative hub with an eclectic mix of more than 30 businesses, ranging from start-ups through to global brands in the creative, media, technology, leisure and event space.
The borrower plans to exit with a commercial term loan within nine months.
Jay Bhogal, director at First Wealth Management, said: “There are few lenders that would have made a loan this large, this quickly against such an unconventional security, but Octane have the confidence and foresight to go to the heart of Hackney. Their highly experienced team instantly saw the asset had a robust income stream with more value to come and so were able to make a rapid decision, which saved my client from missing out on a significant investment opportunity.”
Matt Smith, director of risk at Octane Capital, added: “The security we accepted for a loan of this size would have been an instant red flag for a lot of lenders, but we know the area and its growth potential very well. Hackney is increasingly seen as ‘the new Hoxton’ and this workspace hub is already an integral part of the East London creative scene. Significant development and regeneration continues to improve the area’s evolution and investment credentials and this type of asset is becoming increasingly scarce in London. We have also worked with the borrower many times before and were extremely comfortable with the risk-adjusted returns this opportunity presented.”