International family add 1,200 acre rural estate to their worldwide portfolio
Borrower:
UK Ltd Company (owned by Offshore Trust)
Loan amount:
£16m
Term:
10 years
Repayment:
Interest only
Security:
Rural estate valued at £26m
Loan to Value:
60%
Interest rate:
2.90% 10 yr fix (2020)
Summary
Ashbridge Partners enabled an international client to add a 1,200 acre rural estate to their worldwide portfolio. We secured a high value commercial loan against a UK rural estate based on a diversified business project.
Our trusted network of contacts allowed us to successfully secure the loan, working with the client’s offshore trustees to ensure maximum debt funding.
Goal
A successful international family, with significant worldwide assets, approached us to help them increase their UK income-generating assets. They were able to react at a time when sterling was weak against the dollar, and prime UK land was rising in value.
The property included arable land, a portfolio of let residential units, a large let mansion house, and redundant farmsteads with development potential. The plan was to farm the land and maintain the lettings business whilst exploring additional hospitality and commercial office space opportunities.
Their goal was to obtain the maximum level of debt funding against the estate to prioritise return on capital.
Challenges
The family were not UK based and used off shore ownership structures. Therefore Ashbridge Partners needed to liaise with their offshore trustees to facilitate the borrowing opportunity.
The projected yield from the estate needed to service the interest on a 10 year fixed rate loan (£16m x 2.90% = £464k p.a.)
The family would not draw any income from the business and were likely to be required to fund any additional investment opportunities. Ashbridge conducted a due diligence report on their other assets, and were satisfied that they could endorse the application to a trusted network of key lenders.
Added Value
- The trustees expect the asset value and income to have appreciated by the end of the 10 year term whilst employing the minimum level of capital.
- This has been a successful move for the family, enabling them to diversify and expand.
Next Steps
- At this point, the financing arrangements will be reviewed, which may provide an opportunity to either convert to a capital and interest repayment basis (perhaps over 25 years) or to raise additional monies for further investment.
- In our role as a trusted, specialist advisor, we retain and nurture the relationship with our client (the trustees) over the course of ten years to ensure their finances stay in the best possible shape.