en.Wedoany.com Reported - UK's Recognise Bank has provided £2.66 million in bridging finance to a regional property developer for a redevelopment project in Burnage, Manchester. The 12-month loan, arranged by specialist debt and equity advisory firm Roscap, has a loan-to-value ratio of 65%.

The financing is secured against a former social and entertainment venue acquired by the borrower in 2023, which includes commercial buildings and three residential apartments. Since the acquisition, the developer has obtained planning permission to build 66 residential units on the site.

The borrower will use the funds to repay existing debt on the property, with the remaining capital supporting additional real estate investments and development activities. The expected exit strategy is to transition to development finance.

According to Paul Bagan, Loan Manager at Recognise Bank, this transaction required simultaneous consideration of the existing asset and the borrower's long-term development plans. Bagan noted that significant progress has been made on the project since the borrower acquired the site, with planning permission now secured for 66 residential units. The bank was able to structure a financing arrangement that provides flexibility for the borrower to advance to the next phase of their plans, taking into account the existing security, the borrower's experience, and the proposed exit strategy.

This transaction comes amid broader volatility in the property market, with house prices recording their largest single-month decline since 2012 in June. Despite market conditions, bridging finance continues to provide developers with short-term capital solutions for site acquisitions and refinancing.

Suleman Rafiq, Co-CEO of Roscap, described the transaction as involving a site with a clear development pathway and a borrower with a strong local track record. Rafiq noted that Recognise Bank's approach helped provide the certainty needed to complete the refinancing and release capital for the next phase of activity. The transaction was structured on a service basis, with Roscap working alongside the bank to finalize the financing terms. The development of 66 residential units will significantly increase the density of the Burnage site, which was previously used for social and entertainment purposes.

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