Venn backs London residential towers

The £97.5 million debt facility is the first development loan provided by the UK-based lender.

Alternative real estate lender Venn Partners is providing a £97.5 million (€122.9 million; $153.6 million) debt facility to property developer HUB Residential for the construction of 360 homes at London’s Royal Docks, the firms said in a joint statement.

The financing is the first development loan from UK-based lender Venn and has a three year maturity, Paul House, managing partner of Venn’s property lending business, told PDI.
It is also one of the largest known financings between an alternative lender and a non-listed house builder in the UK and “highlights the continuing departure of traditional lenders from funding residential developments in London”, according to the statement.

As a result of bank lending criteria tightening, “the next generation of developments are going to be more reliant on alternative sources of debt finance,” Steven Sanham, development director at HUB, said.

HUB’s Hoola-London development will be comprised of two towers on the edge of London’s Royal Victoria dock. The 23 and 24-story towers received unanimous planning consent earlier this year from the London Borough of Newham. 

House commented in a statement: “Housing development in London and the South East represents one of the most clear disconnects between rising demand and available bank financing. While many banks are retreating from this area, we see a genuine opportunity to provide finance on market-based returns for much needed new homes.”

London-headquartered Venn Partners has completed thirteen transactions over the past year predominately in the UK but also on the European continent, House said. The value of the transactions have amounted to some £1.2 billion in the real estate market, according to the statement.