Case Study: Tower Hamlets Residential Development
How we arranged development finance for a residential conversion project in Tower Hamlets, Tower Hamlets. From initial enquiry to completion in 16 months.
This case study illustrates how Construction Capital arranged development finance for a residential conversion project in Tower Hamlets, Tower Hamlets, where average property values are £720 per square foot.
The Project
A developer with three completed projects approached us to fund a residential development comprising a mix of apartments and houses in Tower Hamlets.
Key Numbers
| Metric | Value | |--------|-------| | Location | Tower Hamlets, Tower Hamlets | | Project Type | Residential Development | | GDV | £5,760K | | Build Period | 16 months | | Local Rental Yield | 4.4% | | Planning Approval Rate | 77% |
The Challenge
The developer needed to move quickly — the vendor had set a 6-week exchange deadline. Traditional bank funding would have taken 8-12 weeks, risking the loss of the site. Additionally, the developer wanted to maximise leverage to preserve capital for a second project in the pipeline.
Our Solution
We structured a combined senior debt and mezzanine facility:
The key was finding a senior lender comfortable with Tower Hamlets's market dynamics. Tower Hamlets's 77% planning approval rate and 72 active development sites gave lenders confidence in the local market.
The Timeline
The Outcome
The project completed on time and within budget at 16 months. All units sold within 3 months of practical completion at or above the projected GDV.
The developer's return on equity exceeded 25%, significantly enhanced by the leverage structure we arranged. They have since returned to fund two further Tower Hamlets projects through our panel.
Lessons for Tower Hamlets Developers
1. Speed matters — Having a broker with established lender relationships cuts weeks off the process 2. Leverage enhances returns — Combining senior and mezzanine finance significantly improved the developer's ROE 3. Local knowledge counts — Understanding Tower Hamlets's planning environment and market values helped secure competitive terms 4. Exit strategy flexibility — With 4.4% rental yields in Tower Hamlets, developers have the option to sell or hold
Discuss your Tower Hamlets project with us — indicative terms within 24 hours.
Case study arranged by Construction Capital. Details have been adjusted to protect client confidentiality. Rates and terms are indicative.
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