LandlordInvest has completed its first mezzanine loan with Octopus Real Estate to fund the development of a five-storey building in London.
The peer-to-peer property lending platform provided around £300,000 to make up the £6.2m combined senior and mezzanine loan for the construction of the building, which will contain 24 apartments, six of which will be affordable, in Barking Road, London.
The development has a gross development value of £8.4m and the clients are experienced developers who have successfully completed several similar schemes in and around East London.
LandlordInvest co-founder Filip Karadaghi (pictured) said the deal was a “smooth transaction”. He said the platform continues to regularly provide second charge finance with the UK’s “leading lenders” and still plans to fund first charge developments.
Over the past five years, the platform has provided the second charge finance for deals with United Trust Bank, Avamore Capital, Glenhawk, Close Brothers and in February partnered with fellow P2P platform Blend Network to fund a ground-up development deal in Clevedon, North Somerset.
“We have been funding constructions in London, which is a good thing,” said Karadaghi.
“It was a smooth transaction, all professional with no real hiccups. We’re happy to help developments in London and provide good returns for our investors and at the same time providing social benefits.
“We receive a lot of second charge enquires from developments and we choose the best, high quality deals that are a suitable, natural fit. We’ve been doing second charge deals successfully for the past five years and will continue these as long as it offers good risk rewards.
“Second charge deals offer good returns, so we don’t see no reason to not continue doing it. And especially with inflation at very high level, we offer products that provide inflation-beating returns.”
LandlordInvest’s valuation was conducted by Savills, monitoring by Naismiths and legals by Jack Medlicott of MSB.