Indian real estate developer Lodha Group has raised £290 mln (€333 mln) of construction finance to build out its luxury Lincoln Square residential scheme in London, from non-bank lender Cain Hoy.
The bilateral loan is one of the largest ever from one lender for a UK residential project and is the second large development loan originated by Cain Hoy in two months. In April, Cain Hoy funded £337.5 mln of a £450 mln (€516 mln) loan that it arranged for Canary Wharf Group to build 27-storey office tower One & Five Bank Street in the UK capital.
It is thought that Lodha had originally hoped to raise development finance from the banking sector - normally a cheaper source of debt. However, few banks are currently financing UK residential projects with flats selling at substantially higher than £1,000 - £1,200 per sq ft. Ab Shome, the Indian developer’s UK finance director, said that Lodha had received 'competitive offers from three consortiums'.
Matteo Milan, director at Cain Hoy, said the loan is for two-and-a-half years, covering the expected construction period. Practical completion of the project, which includes over 200 apartments priced at about £2,200 per sq ft, is due by Q1 2019. Since launch a year ago, some 78 units worth nearly £130 mln (€150 mln) have been pre-sold.
The new loan includes £80 mln to replace existing debt put in place with Cain Hoy last autumn to start the development. Milan said: ‘We have a good relationship with them and they decided to continue with us. And it was natural for us to continue supporting them. We believe in the scheme.’
Lodha UK said it will unveil another residential project, its super-prime scheme No 1 Grosvenor Square, this summer. The group financed the site’s acquisition with JPMorgan, which does not lend on development.
