A large residential development in the centre of the Isle of Wight
At the beginning of April, an existing client of MSP Capital came to us seeking a development loan to assist them in completing one of their residential developments on the Isle of Wight.
This highly reputable Developer based on the Island, is known for building well-designed, high-specification, and eco-efficient residential housing to cater for the surge in demand for quality-built housing on the Island.
The site itself is situated in an attractive semi-rural area on the Island, with good access to the main towns, and thus has become a highly sought-after location.
Finding a way to seamlessly continue with their development
The development comprises the construction of 28 residential properties that will provide a mix of 18 private units and 10 affordable homes. Having started the build through their own cash resources, the Developer was seeking development finance to assist them in completing the rest of the scheme.
As MSP Capital were providing development finance half-way through a build, we worked closely with the client to help find a way to seamlessly continue with their project, and were able to tailor a loan of nearly £5,000,000 by providing them with a Revolving Credit Facility (RCF).
Given sales were projected to occur during the term loan, the Developer was confident that based on their own projected cashflow model, sales revenues would be generated as the final phases of the build completed, and thus they would not need to fully draw the full build facility.
Our funding terms were therefore based on the Developers cashflow model, but with the ability to offer a fully funded option were it to needed.
Chris Wright, leading internally on this facility, has said:
“I’m so pleased to be working with this client again. The homes they build are of such high quality and they have always been a pleasure to deal with. I’m excited to see the finished properties.”
James Pink, Director of Captiva Homes describes the process they went through; “This is a fantastic site, delivering much needed housing on the Island. The build out of the project had become more complicated than anticipated due to unexpected delays in receiving revised planning consent and inflexibility from the original finance provider. From the moment we spoke to MSP Capital about the project, they were keen to help and came up with a bespoke solution for us in less than 48 hours. We have worked with MSP before on a number of projects and always been happy with their service but they excelled themselves on this one. Their speed and flexibility have been outstanding.”
At the beginning of 2023 we received an update from Captiva on how their project was coming along.
We learnt that they are very happy with the results of the project with a reservation rate 3 to 4 a month and they are on target to achieve all of their sales goals. They are also expecting an overachievement of over £1m on revenue targets that were set at the beginning of the year.
Andrew Titmuss, Sales & Marketing Director of Captiva Homes commented:
“I have been overwhelmed by the levels of continued interest at Highwood Grove and ongoing sales success at a time when buyers are more cautious about spending their well-earned cash.”
“I believe much of our success is due to a great mix of products for buyers and our increased focus on energy efficiency solutions,
but more importantly that our homes have an aspirational beauty and higher specification, yet are still achievable for our local Island customers.”
Smashing targets hasn’t been Captiva’s only focus since we last caught up with them.
They have also been supporting the Solent LEP’s Sustainable Business Support Program and developed an action plan that supports the goal of Captiva achieving ‘net zero’ carbon by 2030.
The Queen’s Jubilee ‘Green Canopy’ is a particular highlight event that Captiva took part in during 2022 with Iain Delaney, CEO of Captiva homes taking part in the planting of the trees.
Offsetting the carbon generated by construction on the island is a priority to Captiva and important to MSP Capital.
We are very pleased to hear of the success Captiva Homes has had with this project and we look forward to future opportunities to work together in the near future.