Octopus Property, part of the Octopus Group, has announced the launch of a development-light product, to meet the increasing demand from SMEs and smaller developers requiring finance for residential schemes that sit outside the traditional refurbishment or development lending parameters. It targets the projects with build costs between €0.57m (£0.5m) and €1.7m (£1.5m).
To date Octopus Property has provided nine loans, totalling €11.3m (£10m), for a diverse range of schemes, including the conversion of an office in Leytonstone, North London, into 10 apartments where Octopus Property agreed on a €1.6m (£1.4m) land loan and a €0.68m (£0.6m) construction facility.
Key features of the development-light product include:
- 8.0% fixed rate per annum
- A maximum loan-to-cost of 85%
- A maximum loan-to-gross-development-value of 70%
- A loan size of €0.57m-€1.7m (£0.5-1.5m)
Gavin Eustace, Head of Development at Octopus Property, commented: “We continue to leverage our market knowledge and relationships to better understand the challenges facing property professionals in accessing development finance, and believe that this product is ideally positioned to fill a gap in the market. With wider macro uncertainty affecting the sector, smaller developers are increasingly looking at ways to re-position existing properties to realise value or embark on smaller ground-up schemes which require a new type of funding to match the risk profile of the project.”