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£1.5m London Office Block Refinance

Over the last few years, there has been a huge devaluation in the commercial sector which has been exacerbated by the higher interest rate environment. This has made it a lot harder for commercial property owners to restructure their current debts. At P10 Financial our specialists are experienced in finding the right commercial lending solutions, even in some of the most complex cases.

A side view of office blocks in Manhattan, New York, United States. It's mid-evening, and there's a purple haze. You can see rectangular office rooms lit up amongst other dotted dark rooms.

Market Turmoil

At the end of 2021, the BOE decided to start increasing interest rates to try and help curb inflation. This caused lenders to tighten their credit policy and caused valuers to become extremely susceptible to the value of commercial assets.

Since then it has been ever more difficult to refinance commercial lending.

Challenges of refinancing in a rising rate environment

With the challenges mentioned, we have still been able to navigate the market for our clients at P10 Financial Group. In this situation, our client was looking to refinance their commercial office in London. They traded from the premises and it was imperative to them that they could refinance from their current high street lender.

By refinancing their office, they would then be able to add another level of income to their business by renting out part of the building that they were not currently using. Their current bank would not permit them to do this.

P10 were instructed to find a resolution. Our resolution was to refinance with a challenger back that we have a strong relationship with. We were able to navigate the office being down-valued as well as secure our clients an extremely competitive 5-year fixed rate to allow them to carry out their future plans.

The result for the client:

  • Value of Assets - £1,500,000

  • Interest rate – 5-year fixed rate at 7.1%

  • Total LTV – 80%

  • Debt Structure – Amortised over 25 years

  • Refinance allowed the business to increase revenue by £40,000 PA due to the fact they could rent out some of their vacant space with the new lender

The P10 service

If you own commercial property and want to ensure you are receiving the best-structured terms available, it is worth contacting the P10 team to see how we can help you. We always aim to add value to our clients by finding a deal, often bespoke, with carefully negotiated terms to suit the client’s interests.

All of this with the friendly and professional service we have become renowned for. We look forward to working with you.