The property investment group Fudiciam, is known for revitalizing underperforming properties and enhancing their business value.
They have recently taken on a project involving the purchase of a neglected but high-potential site in Farringdon. With its specialization in student housing, the group has struck a five-year deal with a top-tier university, promising to supply 110 beds throughout the school year.
This strategic agreement was set in motion at the same time as the property purchase, and it also permits the renting out of the property to tourists and business people when the university is not in session, which is expected to boost profits.
The £16 million loan from Fiduciam aids in refurbishing the site before it’s occupied by the university and helps stabilize rental income. The loan duration is for 30 months, with a monthly interest rate of 0.90%, and there are no fees for early repayment.
The borrower anticipates a considerable increase in the property’s value once it’s fully operational and earning revenue. The loan covers 65% of the property’s value.
Marc Morris, Fiduciam’s UK Underwriting Manager, stated: “Fiduciam was excited to back a seasoned institutional borrower on their new development in the heart of London. The client has adeptly linked a buying opportunity with the demand from end-users, and they will provide much-needed student housing.
“By renting to the university during term time and to business and holiday goers in breaks, we will see the property’s income potential maximized.
“Our adaptable loan options support the borrower in improving the Internal Rate of Return on the project by lessening the upfront cash needed. The Fiduciam loan not only covers purchasing and remodelling expenses but also offers interest coverage as the rental income begins to roll in. With a 30-month loan period, the borrower is also afforded the flexibility of repaying the loan after a year without any charges for early settlement, should the earnings from the property permit it.
“We aim to fully realize the property’s revenue capacity by renting to students during the academic terms and offering it to visitors and business travellers in the vacation periods.
Carl Jabbour, Fiduciam’s Chief Operating Officer, added: “Fiduciam maintains strong connections with various family offices and institutional clients, helping them meet their investment return goals across different assets and levels of risk.
“More and more, those with entrepreneurial spirit recognize Fiduciam for amplifying their equity and offering private debt investment opportunities. We are thrilled to aid this longstanding investment management team with their recent high-potential property undertaking in central London.”
