Central London Tower — 34 Storeys

A well-established London developer had secured planning permission for a 34-storey residential tower delivering 280 apartments — the largest scheme we have structured to date. The total development cost was approximately £68.6m, with a projected GDV of £115m. The capital requirement was substantial and no single lender could provide the full facility.

The planning permission carried significant Section 106 obligations including 35% affordable housing delivered on-site, a community infrastructure levy, and a commitment to local employment during construction. These obligations materially affected the cashflow profile and required careful modelling to ensure the scheme remained viable at the required leverage levels.

The developer had significant equity but needed a multi-layered capital structure to make the deal work: senior debt, mezzanine finance, and an equity co-investment partner — all coordinated from the outset.

Structuring a three-layer capital stack at this scale is among the most complex work we undertake. The senior lender required first charge security and tight drawdown controls. The mezzanine provider needed an intercreditor agreement that protected their position without constraining the senior lender's enforcement rights. The equity partner required a profit waterfall that incentivised the developer to outperform while protecting their downside.

As a Higher-Risk Building under the Building Safety Act, the scheme required BSR Gateway 2 approval before construction could commence — meaning full RIBA Stage 4 design had to be complete before application. The Gateway processing period added to the pre-construction timeline, extending the interest carry on the land facility. At completion, Gateway 3 will impose a further period between practical completion and first occupation — a window of maximum financial exposure that the facility terms needed to accommodate.

The construction methodology — reinforced concrete frame with a 28-month programme — introduced significant market risk. Total interest costs across the full capital stack — senior debt and mezzanine combined — would approach £7m over the build period. The cashflow model needed to account for phased completions, with the lower floors completing and selling before the upper floors were finished.

The affordable housing obligation added a further layer of complexity. The 35% affordable element was to be sold to a registered provider on a forward commitment basis, but the timing of that sale needed to dovetail with the senior lender's drawdown schedule and security requirements. The cross-subsidy from private sales to affordable delivery needed to be accurately reflected in the appraisal.

We structured the capital stack in three coordinated layers, underpinned by a comprehensive development appraisal, cashflow model, and full business plan that we prepared to institutional standard — presenting the deal and the borrower in the strongest possible light. £42m of senior development finance from a major institutional lender experienced in high-rise London residential — negotiated at 6.8% per annum with a 28-month term and phased drawdowns aligned to the QS certification schedule. £18m of mezzanine finance from a specialist mezz fund, taking total debt to approximately 87% of costs. The mezzanine was structured on a rolled-up interest basis with a profit participation element capped at 15% of net profits.

The remaining equity gap was filled by a co-investment partner we introduced from our network of UHNW and family office contacts. The equity was structured as a preferred return plus profit share, with the developer retaining majority economics above a 20% IRR hurdle.

We negotiated the intercreditor agreement between all three capital providers, coordinated the legal workstreams across four sets of solicitors, and produced the master cashflow model that all parties relied upon. The quality of our modelling and strategy documentation gave each party the confidence to commit — and secured best-available pricing across every layer. The forward commitment from the registered provider for the affordable units was structured as a separate workstream, with completion payments timed to coincide with the senior facility's repayment schedule.

All three layers of the capital stack completed simultaneously — a significant coordination achievement given the number of parties involved. Construction commenced on programme and the tower has now reached the 22nd floor. Off-plan sales of private units have exceeded expectations, with over 55% reserved at values averaging 8% above original appraisal assumptions.

The forward commitment with the registered provider for the affordable units has been signed, providing certainty on approximately 30% of the total GDV. Total arrangement and brokerage fees across the entire capital stack were approximately £2.8m. The coordinated approach saved an estimated £1.2m compared to sourcing each layer independently through separate advisers — representing significant value on a deal of this scale relative to the developer's projected profit in excess of £18m.