New Topland partnership reveals first deals for £200-mln. residential mezzanine fund (UK)

Topland has revealed it has joined Dragonfly Property Finance and residential developer Westcity in a new residential mezzanine lending partnership. The news follows on from Topland's announcement in October to invest up to £200 million in a mezzanine fund.

01 Hyde Park Place 141

1 Hyde Park Place, London.

The trio announced they have already co-funded £20 million of mezzanine in transactions. One of the first deals was a £12-million facility to Central London-based residential developer Quint & Flagship Group for their high end development of a five-story Georgian residence at 1 Hyde Park Place, London W2.

Being on the northern side of Hyde Park and only 300 m from Marble Arch this corner property overlooks Hyde Park and Marble Arch and will represent a conversion from mixed-use offices and residential, to a single 16,200-ft² (1,500-m²) residence. The facility enabled the repayment of an existing loan and provided development finance.

Tom Betts, Director of Structured Finance at Topland said: "This partnership represents a formidable offering in financial and residential development expertise. When Topland announced in October it wanted to invest in mezzanine it soon became apparent that the biggest appetite for this form of funding was from the residential sector.

"Our partnership's understanding of residential development, our credibility and ability to do deals quickly will give comfort not only to our clients but to their existing lenders."

Jonathan Samuels, CEO of Dragonfly Property Finance, added: "Given the funding and refinancing difficulties that are currently confronting the property industry we looked at what solutions we could jointly offer. We see a lot of demand for our services in the areas of restructuring and refinancing, and are very comfortable talking to the banks on behalf of clients.

In effect we have created a platform which now offers a one stop shop to residential investors and developers which can offer project assistance, bridging finance, senior debt, and mezzanine funding on prime central London residential."

The partnership will focus on residential opportunities with planning consent within prime central London. It defines this area running from Hampstead in the north to Clapham in the south, and Southwark to the east and Chiswick to the west.

Samuels said: "Typically we will look to lend a maximum of 80% of total development costs, including purchase price and build costs, up to 65% against the Gross Development Value. The term would cover the build period plus a six to 12 months sales period. Loan sizes can be from as low as £0.5 million and up to £25 million."

Ira Rapp, Westcity's Chief Executive, added: "We believe the combination of our strengths gives us added firepower and sector knowledge which makes us a cost effective choice for property developers looking for refinancing opportunities in today's market place."

Hasan Sharif, CEO of Quint & Flagship group of companies, commented: "It is a challenging environment for real estate development finance following the recent credit crunch and turmoil in the banking sector. Dragonfly is leading the initiative to finance qua

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