Case snapshot
- Facility
- Acquisition finance across two loans
- Loan amount
- £9,800,000
- Loan-to-value
- 70%
- Rate
- 6.94% fixed for 3 years
- Term
- 5 years
- Asset
- 95,000 sq ft multi-let office, Thames Valley
Repositioning Office Assets
The client, a privately backed property investment group with a strong track record in UK regional offices, approached P10 to assist them in funding the acquisition and long-term repositioning of a multi-let asset in Thames Valley.
Client Strategy:
Acquire a well-located, income-producing office asset
Deliver a multi-year capex programme to upgrade the building
Upgrade tenant mix and rental levels to increase cashflows
Drive long-term capital growth
The Challenges
Regional offices have struggled to keep up with Central London & West End. This creates uncertainty, but also creates opportunity. We believe our client will be able to unlock the value in the asset, although as always there are challenges on deals of this nature. Our initial challenges were as follows.
Leverage
Due to the CAPEX requirements, we were aiming to deliver a higher leverage deal to protect our clients cash reserves. Given the nerves around regional offices, this added another layer of complexities.CAPEX Plan
The multi-year capex phase required low initial outgoings to preserve cash and execute works.Complex Covenant Environment
With vacancy, WAULT, capex and rental reversion all in play, the debt needed to align with covenant requirements.Valuation Movements
As with all deals of this level, there can always be huge differences of opinion to how much an asset of this nature is valued at.
Tight Timelines
This was a competitive acquisition with committed deadlines on exchange and completion.
The Deal Highlights
Leverage: 70% (83% of Vacant Possession Value)
Total Facility: £9,800,000
Structure: Part amortised, part interest Only profile created across two separate loans
Pricing: 3 year Fixed rate at 6.94% (Personalised pricing)
Term: 5 year Term
Property GIA: 95,000 sq ft
CAP Value (£PSF): £147
Yield – 15%
Conclusion
This is structured finance at its best. Not complex for the sake of it, but designed to give the borrower flexibility, strategic control, and the ability to unlock long-term value from a well-positioned regional office asset.
If your acquisition or repositioning strategy demands something more tailored than a cookie-cutter loan, we’re ready to deliver the structure that makes it happen.
