Example Scenario: City Centre Residential Development Finance

This is an illustrative, hypothetical scenario showing how Construction Capital might structure development finance for a residential conversion project in City Centre, Bristol, where average property values are £420 per square foot. It is not a record of a completed transaction — real facilities are agreed individually based on each developer's circumstances and a lender's underwriting.

The Project

In this scenario, a developer with three completed projects approaches us to fund a residential development comprising a mix of apartments and houses in City Centre.

Key Numbers

| Metric | Value | |--------|-------| | Location | City Centre, Bristol | | Project Type | Residential Development | | GDV | £3,360K | | Build Period | 16 months | | Local Rental Yield | 5.2% | | Planning Approval Rate | 76% |

The Challenge

The developer needs to move quickly — the vendor has set a 6-week exchange deadline. Traditional bank funding would typically take 8-12 weeks, risking the loss of the site. Additionally, the developer wants to maximise leverage to preserve capital for a second project in the pipeline.

A Possible Solution

A combined senior debt and mezzanine facility could be structured along these lines:

The key would be finding a senior lender comfortable with City Centre's market dynamics. Bristol's 76% planning approval rate and 52 active development sites tend to give lenders confidence in the local market.

An Indicative Timeline

A Plausible Outcome

In this scenario, the project completes on time and within budget at 16 months, with all units retained as buy-to-let investments, refinanced onto long-term mortgages at the enhanced value.

The developer's return on equity could exceed 25%, significantly enhanced by the leverage structure. Every deal is different, and actual outcomes depend on the specific site, developer, and lender terms.

Lessons for Bristol Developers

1. Speed matters — Having a broker with established lender relationships can cut weeks off the process 2. Leverage enhances returns — Combining senior and mezzanine finance can significantly improve a developer's ROE 3. Local knowledge counts — Understanding Bristol's planning environment and market values helps in securing competitive terms 4. Exit strategy flexibility — With 5.2% rental yields in Bristol, developers typically have the option to sell or hold

Discuss your Bristol project with us — indicative terms within 24 hours.

This is an illustrative example for guidance only, not a completed transaction. Rates and terms shown are indicative and individual facilities are subject to underwriting.