Public sector finance solutions
Andrew Screen, GVA Financial Consulting, GVA
Tue 27th March 2012
The requirement to refinance investment properties has been caused by either the breach of lending terms, primarily loan to value, as a result of the value of the asset falling in comparison to the overall loan, or the inability of the income to service the interest and /or capital repayments.
Local authorities can provide the following possible solutions:
- Leasing space within the building. This space would be used for community services (normally front office);
- Equity investment where it is likely that the value (or income) will increase in the short to medium term;
- Provide funding to tenants (by way of di minimis funding under state aid rules) of approximately £50,000 per business, per year. This can be provided by way of a rent rebate or towards business rates;
- Purchase the building. This would typically be done where the building is part of an overall regeneration plan by the local authority;
- Enter into a joint venture with the owner/administrator/bank where the property is suitable for development and part of an overall regeneration programme.
GVA Financial Consulting works closely with many of the local authorities and JESSICA Funds and also has close links with the debt and equity funding markets. We are therefore able to provide alternative funding structures to both property developers and investors who seek to restructure or obtain funding.