£1.85m Refinance Secured Against Retail Assets

Background

P10 Financial was engaged by a long-established property investment group with a proven 25+ year track record in acquiring, managing, and holding commercial real estate. The client had built a significant portfolio of income-producing assets across the UK, underpinned by a conservative long-term investment philosophy and a focus on stable yields.

However, over the years, the group had grown into a highly layered and complex legal structure. It comprised more than 230 separate companies, with immediate ownership split across various limited companies and a UK discretionary trust. While the underlying property portfolio was strong, historic credit issues across parts of the wider group, including several past company liquidations, had begun to cause serious friction when approaching lenders.

The immediate requirement was to refinance a parade of retail assets in Bristol, but conventional lenders were unwilling to proceed once the full complexity of the group structure and credit history came into focus.

The Challenge

This deal presented several obstacles, not due to the strength of the asset, but because of the layers of perceived risk most lenders were unwilling to unpack.

1. Group Complexity:
   The client’s ownership structure spanned over 230 companies, many dormant or non-operational, with a discretionary trust at the top. Most lenders couldn’t follow the ownership trail clearly.

2. Historic Credit Events:
   There had been historic company liquidations within the wider group. While unrelated to the asset-holding entities, these events triggered red flags in credit scoring and underwriting filters, blocking further engagement.

3. Bridging Exit Pressure:
   The client was sitting on an expensive short-term bridging facility at 1.1% per month, equating to nearly £7,500 per month in interest. This was eroding cash flow and delaying the execution of a broader group-wide asset management strategy.

4. Market Perception vs Reality:
   The asset was well-let, income-producing, and in a stable location, but the structure around it created enough noise to obscure that reality. Most lenders priced for complexity rather than security quality.

Our Approach

P10’s intervention was less about sourcing a lender, and more about removing the noise so that the fundamentals could be properly seen.

• Mapped the Full Group Structure:
  We carried out a forensic mapping of all relevant entities, isolating only those involved in the transaction, and preparing a lender-facing pack that clearly demonstrated legal ownership and control.

• Contextualised Historic Credit Issues:
  We acknowledged the credit history but demonstrated how the events were ring-fenced, immaterial to the present deal, and managed appropriately. This repositioned the perceived risk profile.

• Shifted Focus to Asset Quality:
  The retail parade itself was income-producing, with a diversified tenant mix and a proven rental track record. We rebuilt the underwriting narrative to highlight asset performance, not just corporate structure.

• Repositioned from Bridging to Term Debt:
  We were clear that one of the deal’s core objectives was to exit an expensive bridging loan that was no longer fit for purpose. This shifted the lender mindset from “complex refinance” to “strategic clean-up.”

• Matched to a Lender with Nuanced Appetite:
  We avoided high street and institutional lenders with rigid risk models and instead approached a lender who understood entrepreneurial structures, trust-owned vehicles, and real estate-backed income.