Maslow Capital creates £250m fund to buy specialist loan books
The aim of the fund is to work with development finance providers and borrowers to acquire existing loan portfolios and provide costs to help with the completion of facilities.
The fund will also be used to refinance existing loans.
Through the fund, Maslow said it hoped to allow a return of funds to investors, while releasing lenders from the cash flow pressures they face due to being obliged to fund live developments through to completion.
The fund will run alongside Maslow’s existing origination business which primarily provides loans of between £5m and £150m to developers focusing on residential and student accommodation.
Maslow is looking to allocate over £250m to acquire existing loan books worth £50m and more.
The lender said it identified funding requirements in closed and open-ended funds and structures which required a steady flow of investment to continue to fund live developments.
Maslow said it had seen a slowdown in loan redemptions due to site closures, supply chain disruption and a lack of buyer demand caused by the current crisis, along with a “curtailment in mortgage availability”.
Ellis Sher (pictured), CEO and co-founder of Maslow Capital, said: “While we will continue to originate and finance the delivery of ground up developments, the launch of the Maslow liquidity fund will help broaden the range of transactions we can support.
“The pandemic has caused companies to relook at their business models and our view is that in our development funding niche, existing lenders and borrowers will be seeking alternative ways of de-risking and generating liquidity, while protecting asset values by ensuring developments reach practical completion.
“The core objectives of our debut liquidity fund is to do precisely that.”
Maslow Capital and Investec back pair of £20m-plus new build projects
DML Development Managers was named the delivery partner and a co-investor having steered the project through planning.
The contractor Robertson, which began work on the scheme in Q1 2019, has been hired to complete in Q2 2020 for the start of the academic year.
The project is intended to meet rising demand for student housing in the city, which has been driven partly by a 32 per cent rise in the number of Chinese students accepted onto courses.
“This is an exciting transaction for us. UK PBSA is emerging as a major asset class as institutional investors recognise how rewarding, yet defensive, it can be,” said Sky Mapson, head of deal origination at Maslow Capital.
Ben Hall, head of investment at QIP, added: “The team at Maslow Capital has very strong market expertise and product knowledge. They take a highly practical approach to get deals over the line.”
Private equity-backed QIP completed a PBSA scheme in Sheffield in 2017. The firm said it anticipated developing 600 units in 2019 and doubling this in 2020.
Robertson has previously delivered PBSA projects including 437 units in Nottingham.
Lender supports planning success
Meanwhile down south, Investec Structured Property Finance has agreed to loan £25m to James Taylor Homes to redevelop what was Antionette Hotel in Kingston upon Thames into 89 residential units (architects design pictured).
The loan is for 33 months at 53 per cent loan to cost and represents James Taylor Homes’ second largest project to date.
The lender said it “supported the client through a challenging planning process to increase the number of units by 12 per cent.”
“Our understanding of the quirks and pitfalls of brownfield sites enabled us to provide additional support throughout the process tackling complex issues,” said Will Scoular, co-head of origination at Investec Structured Property Finance.
“Investec’s guidance and expertise across various segments has been invaluable to assisting our growth during the past decade,” added Emil Sohrab, James Taylor Homes chief executive.