Innovative lending approach unlocks new investment potential
Specialist commercial lender InterBay, part of OSB Group, has finalised a £10 million loan facility to support the refinancing and investment in two multi-let properties in East London. The transaction, structured as two facilities and cross-collateralised across two legal owners, facilitated the repayment of existing debt while raising capital for further investment.
The properties, situated in the dynamic East End of London, each have distinct commercial and residential characteristics. The first property is a commercial building featuring bazaar-style retail space on the ground and first floors, with tuition space and storage facilities on the upper levels. The second property, formerly a public house, has been converted into a mixed-use development comprising small retail units at ground level and nine self-contained flats above, all let under Assured Shorthold Tenancies.
Given the complexity and scale of the loan, the case was reviewed by the Transactional Credit Committee, which assessed the application at an executive level. Several lending policy exceptions were approved, including a blended Interest Cover Ratio (ICR) and Loan-to-Value (LTV) ratio to accommodate the two legal owners. The core LTV was based on the open market investment value, and tenants on shorthold leases were factored into the assessment. Additional assurance was provided through the review of five years’ operating accounts, minimal occupancy voids, and sustained tenant demand.
“The InterBay team collaborated closely with Sirius to help provide a tailored solution for a case that not every lender would be able to handle,” said Marc Callaghan (pictured), head of commercial lending at InterBay. “This case highlights the strength and experience that InterBay has in overcoming even the most complex of commercial cases.”
“This case is a great example of how to manage complex refinancing and was expertly executed by Sirius and InterBay,” said James Cassidy, senior associate at Sirius Finance. “Shopping centres with short-term commercial lease agreements come with their intricacies, but our partnership continues to pay dividends. We are very much looking forward to working with the InterBay team on the next one!”
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